A thorough investigation of the financial information is required to uncover the true earnings capability of the business. Again, if the earnings are stable and growing, a higher multiple is used. If the earnings are variable or declining, a lower multiple is used. At this level, Buyers may be paying for market share, rights to patents and processes, additions to product lines, or the benefits of strategic or administrative consolidation. Rules of thumb.
Most industries have one of more rules or thumb.
However, they can vary widely and in most cases do not give an accurate value of a business. The business valuator will be able to decide what is the most relevant information about a business and then make an informed decision about its value. The value of a business valuator. Business valuation is as much an art as a science. While the business valuator does employ standardized formulas and methods to calculate value, he works from assumptions that are based on his experience in the market place and his familiarity with the similar businesses.