How I Think About Business Valuation (Infographic)

By Tim Vipond, Corporate Finance Institute

Over the years I've spent a lot of time thinking about and working on business valuations across a broad range of transactions.  Given that I'm a visual learner, I thought it would be helpful to illustrate my thoughts in a diagram.

Top Down vs. Bottom Up

As I look at the diagram it logically flows from top to bottom, however, when building a financial model to value a business I usually think about it bottom up, and in an iterative way.  I start in the bottom left corner of the diagram with historical financials, working my way up to the top, then back down again to build the...