This is an MS Excel-format worksheet that utilizes DCF (Discounted Cash Flow) - a widely accepted method to calculate the value of a profitable and ongoing business.
How Does the Concept Work
In business finance, Discounted Cash Flow (DCF) analysis is a method of valuing a business or its money-generating assets using the concept of the time value of money. Future cash flows are estimated and discounted by using the cost of equity to give their present values. The sum of all future cash flows that belong to business owners, both incoming and outgoing, is taken as the value of the business in question.
This model is intended to provide business owners with a starting point in determining the asking price. Any definitive valuation would require a review by a qualified appraiser.