Also known as Capitalization of Earnings, this is a common method of valuing a business based on its future estimated benefits. It normally uses a measure of earnings or cash flow that is generated by the company. Subsequently, the estimated future benefits are capitalized using a capitalization rate.
Capitalized Earning Approach
Also known as Capitalization of Earnings, this is a common method of valuing a business based on its future estimated benefits. It normally uses a measure of earnings or cash flow that is generated by the company. Subsequently, the estimated future benefits are capitalized using a capitalization rate.
