When a company sale or investment process comes up, the conversation always lands in the same place:
So, what’s the company worth?
Simple question. Usually, people expect a single number. But valuation rarely produces just one result. More often, it shows how a company’s current performance and future expectations are being interpreted together.
That’s why the same company can be valued differently depending on the lens you use.
Two Core Approaches
In practice, valuation discussions typically center on two methods.
The EBITDA Multiple focuses on current performance: “What is this company producing today?”
Discounted Cash Flow (DCF) looks forward, discounting the cash flows expected in the future back to present value.
Put them side by side, and you’re reading the same company through two different time frames. One reflects what’s happening now; the other, where it’s heading.
Why Do They Often Disagree?
The gap comes down to how assumptions are weighted.
EBITDA multiples are shaped by comparable market transactions. DCF is driven by the company’s own projections, discount rate, and growth assumptions.
Both require rigorous analysis and solid reasoning. Neither is “correct” on its own.
The Bottom Line
Valuation isn’t just a technical output. It’s a structured conversation about the company’s past, present, and future.
Understanding which perspective produces what result — and why — is what enables better-informed decisions whether you’re selling, raising capital, or planning your next strategic move.
