A: Although Valid Value was originally developed as a Discounted Cash Flow (DCF) valuation model, Valid Value is not designed exclusively for either DCF valuations or Multiple valuations. Instead, it supports both approaches, allowing valuation professionals to select the methodology—or combination of methodologies—that is most appropriate for the company being valued and the purpose of the valuation.

The DCF method estimates the value of a business by calculating the present value of its expected future cash flows. Because DCF valuations require detailed assumptions about future performance, they provide valuable insight into the drivers of business value and the impact of changing financial expectations.

Multiple valuations, by contrast, determine value by comparing a company with similar businesses or completed transactions using financial ratios such as EBITDA, EBIT, revenue, or earnings multiples. This market-based approach is often used in mergers and acquisitions, investment analyses, and fairness opinions because it reflects how comparable companies are priced in the marketplace. Multiple valuations are generally quicker to perform and serve as an important benchmark against intrinsic valuation methods.

Valid Value supports both methodologies within a single, integrated valuation environment. Users can perform a detailed DCF analysis while simultaneously calculating values based on market multiples. This makes it easy to compare the outcomes of different valuation methods, identify differences, and assess whether the results are consistent with market expectations.

In practice, experienced valuation professionals rarely rely on just one method. Instead, they combine forecasted cash flow approaches and market-based approaches to develop a well-supported valuation conclusion. Valid Value has been designed with this professional workflow in mind, enabling users to analyse various valuation methods, document their assumptions, and present their findings in a consistent and transparent valuation report.

Ultimately, Valid Value is equally well suited for DCF and Multiple valuations. Its strength lies not in favouring one method over another, but in providing a flexible platform that supports recognised valuation methodologies and helps professionals apply the most appropriate approach for each valuation assignment.