Business Valuation Methods Explained: DCF, Market Multiples and Asset-Based
By Bill Anderson, FCCA, Chief Executive Officer, Assetica — 2026-06-18
DCF, market multiples and asset-based valuation: how each method works, when it applies, and why a credible valuation usually combines two.
The income approach (DCF)
Discounted Cash Flow values a business on the present value of its expected future cash flows, discounted at a rate reflecting their risk. Best for profitable businesses with predictable, forecastable cash flows. Its weakness is sensitivity to assumptions, so growth and discount-rate inputs must be disclosed and defensible.
The market approach (multiples)
The market approach applies an EBITDA or revenue multiple, drawn from comparable transactions and listed peers, to normalised earnings. Best for established businesses with identifiable sector peers. UAE multiples range from 3x to 5x EBITDA for trading and F&B up to 8x to 15x for technology. Its weakness is that comparable private UAE transactions are scarce, so the multiple needs judgement.
The asset-based approach (NAV)
Net Asset Value measures the business as assets minus liabilities, adjusted to fair market value. Best for asset-heavy businesses, holding companies and companies in distress. Its weakness is that it usually ignores goodwill and operating value, so it understates healthy profitable companies. A credible valuation triangulates at least two methods and reconciles them.
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.
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 free scoping call. Standard reports are issued in five to seven business days.