The major advantage of the value driver approach to valuation is the implied assumption that a single value driver or factor is representative of the total value of the business.

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The major disadvantage of the value driver approach to valuation is the implied assumption that a single value driver or factor is representative of the total value of the business. In reality, there are multiple factors that contribute to the overall value of a business and the value driver approach may oversimplify the valuation process.

The Major Advantage of the Value Driver Approach to Valuation