Common approaches to business valuation include Discounted Cash Flow (DCF), Trading Comparables and Transaction Comparables.
Enterprise value accrues to both equity and debt holders; equity value accrues only to shareholders. Companies are usually compared on enterprise value.
In a stock purchase the acquirer buys shares of the company including all assets and liabilities; in an asset purchase only selected assets are acquired, without liabilities.
Average multiples (EV/EBITDA, EV/Sales, P/E) of listed comparable companies are applied to your business. Private companies are typically valued at a 20-30% discount to listed peers due to illiquidity and risk.
