BUSINESS VALUATION: A COMPARABLE STUDY OF DISCOUNTED CASH FLOW AND COMPARABLE COMPANY ANALYSIS ACROSS INDUSTRIES

Abstract

This thesis examines the practical aspects of two widely used widely used valuation methods, the Discounted Cash Flow (DCF) and Comparable Company Analysis (CCA) models. It uses a comparative analysis to assess their potential as well as their limitations across three industries: technology, healthcare, and consumer goods. The paper finds that the DCF method is appropriate for valuing firms with stable cash flows. However, it is subject to excessive assumption bias, and slight miscalculations can impact the valuation results. It also proves that CCA is a strong instrument to value firms in high-growth and volatile sectors. The results stress the need for cautious financial modeling and provide analysts with practical guidance in choosing valuation tools across different market environments.