Business valuation methods can generally be divided into three basic groups:

1. The income method
2. The comparative method
3. The asset method.

The first of them, the income method is based on the assumption that the value of the company is equal achieved in the future by the company revenue. Business valuation using the income method, therefore, is based on determination of the present value of estimated future income. And although such a process seems to be a logical (and even when we think: how much is my business worth, at first glance the answer pops up: "as much as they earn in the future"), it is exposed to the risk of unfairness resulting from bias and subjective evidence of valuation) to determine precisely estimated future income.

The income method is the appropriate method of valuation of the company - provided that the assumptions about the size of future income will be based on a realistic and thorough analysis, taking into account the optimistic scenario and a pessimistic, and so with the principle of due diligence (eg. Supported by the analysis of market trends).

Business valuation using the income method consists of two groups: a method based on discounted cash flows and multiples method, based on the comparative approach.

The method is based on discounted cash flows (DCF called, discounted cash flow) comes from the relationship of the company at the time of the valuation of monetary income that it will generate in the future, which in turn leads to the valuation of a company by comparing it to similar entities.

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