Business Valuation Methods Explained: DCF, Market Multiples and Asset-Based
By Bill Anderson, FCCA, Chief Executive Officer, Assetica · Published 2026-06-18
Direct Answer: There are three core business valuation methods. The income approach (Discounted Cash Flow) values a business on its projected future cash flows. The market approach values it using EBITDA or revenue multiples from comparable transactions and listed peers. The asset-based approach values it as net assets. A credible valuation usually triangulates at least two methods, with the weighting depending on the business and the purpose of the report.
Ask how a business is valued and you will hear three families of method. They are not competing answers; they are different lenses, and a good valuer chooses and weights them according to the business and the reason for the valuation. Here is what each one does, when it fits, and where it falls short.
1. The income approach: Discounted Cash Flow (DCF)
DCF values a business on the present value of its expected future cash flows, discounted at a rate that reflects the risk of those flows. It captures the intrinsic value of the business as a going concern, looking forward rather than back.
Best for: profitable businesses with predictable, forecastable cash flows, particularly in technology, services and healthcare. Weakness: only as good as its assumptions; small changes to growth or discount rate move the answer a lot, which is why the assumptions must be disclosed and defensible. Our financial modelling work underpins robust DCFs.
2. The market approach: EBITDA and revenue multiples
The market approach applies a multiple, drawn from comparable transactions and listed peers, to the business's earnings (usually normalised EBITDA) or revenue. It answers the question: what are similar businesses actually worth in the market?
Best for: established businesses with identifiable sector peers and consistent profitability. UAE multiples vary widely by sector, from 3x to 5x EBITDA for retail and F&B up to 8x to 15x for technology and SaaS, as set out in our multiples reference guide. Weakness: truly comparable private UAE transactions are scarce and prices rarely disclosed, so the multiple must be selected with judgement, not copied from a headline.
3. The asset-based approach: Net Asset Value
The asset-based approach values the business as the difference between its assets and liabilities, adjusted from book value to fair market value. It looks at what the business owns rather than what it earns.
Best for: asset-heavy businesses, holding companies, property businesses, and companies in distress where earnings are weak relative to assets. Weakness: it usually ignores goodwill and the value of the business as an operating system, so it tends to understate a healthy, profitable company.
Why valuers combine methods
No single method is right for every business. A profitable SaaS company is best captured by DCF and market multiples; a property holding company by net asset value; a trading business by multiples cross-checked against assets. A credible valuation triangulates at least two approaches, explains the weighting, and reconciles the differences. A report that relies on one method without justification, especially a bare revenue multiple, is exactly the kind that buyers, courts and the GDRFA discount or reject.
Which method values your business?
The honest answer is usually "more than one". The right combination depends on your sector, your earnings profile, your asset base and the purpose of the valuation. That judgement, choosing and weighting the methods and defending the result, is the core of what an independent valuer does.
Frequently Asked Questions
What are the three main business valuation methods?
The income approach (Discounted Cash Flow), the market approach (EBITDA or revenue multiples from comparable transactions and peers), and the asset-based approach (net asset value). Each suits different businesses and purposes.
Which valuation method is most accurate?
No single method is universally most accurate. DCF suits profitable, forecastable businesses; multiples suit established businesses with sector peers; asset-based suits asset-heavy or holding companies. A credible valuation combines at least two and reconciles them.
Why does my valuation use more than one method?
Because triangulating methods cross-validates the result and makes it defensible. A valuation relying on a single method, particularly a bare revenue multiple, is the kind buyers, courts and authorities are most likely to challenge.
Want the right method applied to your business?
Assetica selects and weights the appropriate methods and delivers a defensible, independent valuation to RICS, IFRS and IVS standards. Scoping call.
Get an independent valuation →This article is general educational information on valuation methodology, not advice on a specific valuation.
Disclaimer. This article is general information about valuation practice in the UAE and is not a valuation, an opinion of value, or tax, legal or investment advice. Any figures or reference ranges are indicative and are not a quotation for any specific business. Rules, rates and the requirements of individual authorities change, so confirm the current position before relying on anything here. For your own circumstances, book a scoping call.
Speak to Assetica about Business Valuation
Assetica is an independent business valuation firm in Dubai. We do not audit and we do not broker deals, so the number carries no conflict. Read more about business valuation, or book a scoping call. Standard reports are issued in five to seven business days.