Glossary
With over 200 terms in both English and French, our M&A Dictionary is designed to help you better understand the key words and concepts related to the sale oe purchase of a business in Canada.
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Capitalization of Cash Flow Method
« Back to Glossary IndexCategory: Business Valuation
The Capitalization of Cash Flow Method is one of the valuation methods under the income approach. It is used by business valuators to estimate the fair market value of a business by capitalizing expected future cash flows. The business value is calculated by dividing the expected annual cash flow by the capitalization rate. The formula is generally expressed as: Business Value = Expected Cash Flow /Capitalization Rate.
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