An asset-based approach is a type of business valuation that focuses on a company's net asset value (NAV), or the fair market value (FMV), of its total assets minus its total liabilities to determine what it would cost to re-create the business.
For calculating the Adjusted NAV, the valuer should factor in the fair value of the assets, contingent liability, Tax shield on accumulated losses, the impact of Auditor qualification, and Due Diligence, money to be received from warrants, stock options and impact of corresponding shares, etc.
The Income-based method of valuation based on the premise that the current value of any business is a function of the future value that the company can expect to receive.
In this method, value is determined by comparing the subject, company with its peers in the same industry of the similar size and region.
