A method of determining the value of a business based on its profit potential is known as a/an ______.
A) balance sheet method of business valuation
B) asset method of business valuation
C) income statement method of valuation
D) cash-flow method of valuation

Question

Quizplus · Accepted Answer

The income statement method of valuation is based on the profit potential of a business. It uses the income statement to determine the business's earnings and then applies a multiple to those earnings to arrive at a value for the business.

A Method of Determining the Value of a Business Based