If you want to buy a business that is growing rapidly, what is the best valuation method to use to determine a fair price for it?

Question

Quizplus · Accepted Answer

The future earnings method is the best choice when buying a rapidly growing business because it takes into account the potential future earnings that the business will generate. This method forecasts future earnings based on historical performance, growth rates, and market trends, and discounts them back to their present value to arrive at a fair price for the business. The other methods may not accurately reflect the true value of a growing business.

If You Want to Buy a Business That Is Growing