A simple overview of asset-based, earnings-based, cash-flow, and multiple-based valuation approaches.
Published: 2026-03-21
Definition
Valuation methods are the frameworks investors use to estimate intrinsic value from assets, earnings, cash flow, or comparable market prices.
Common methods
Asset-based valuation
Earnings power value
Discounted cash flow
Relative valuation using market multiples
Why it matters
Every valuation method depends on input quality. If earnings are distorted or weak-quality, an earnings-based valuation can produce a misleading result even when the math looks correct.
Where to apply it
Use valuation methods after checking Earnings Quality. Better inputs usually matter more than finer valuation precision.
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