Business Valuation Methods Explained: DCF, Multiples & Asset-Based
The three core business valuation methods used in the UAE, when each applies, and what owners should prepare for a credible valuation engagement.
Whether you are raising capital, exiting a shareholder, settling a divorce, or filing a transfer-pricing report with the FTA, the choice of valuation method materially changes the headline number. UAE-based valuers typically apply one or more of three core approaches.
1. Discounted Cash Flow (DCF)
DCF projects unlevered free cash flows for 5–10 years, discounts them at a risk-adjusted rate (WACC), and adds a terminal value. It suits established UAE businesses with predictable cash flows — clinics, schools, logistics operators, SaaS firms. DCF is sensitive to assumptions, so reports should include scenario analysis.
2. Market Multiples
The multiples method applies an industry-relevant multiple (EV/EBITDA, EV/Revenue, P/E) to the company's actual or normalised earnings. It is widely accepted for SME transactions in the UAE and is quick to apply, provided credible comparable transactions exist in the region.
3. Asset-Based / Net Asset Value
Asset-based valuations restate the balance sheet to fair value. This approach dominates for holding companies, real-estate-heavy businesses, and distressed-asset scenarios. Tangible and intangible assets — including goodwill, brand and intellectual property — are valued individually.
What owners should prepare
- Three to five years of audited financials.
- Year-to-date management accounts.
- Trade licence, shareholder agreement and cap table.
- Customer concentration data and major contracts.
- Capex schedule and depreciation policy.
Asset Valuations Dubai delivers court-admissible, IVS-compliant business valuations across the UAE for transactions, disputes and statutory filings.
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