Ernst & Young Valuation Analyst Interview Questions and Answers

The three methods of valuation are market approach, income approach, and asset-based approach.

• Market approach involves comparing the subject company to similar companies that have been sold recently.

• Income approach calculates the value of a business based on its expected future income or cash flow.

• Asset-based approach determines the value of a business by looking at its assets and liabilities.

Book value is the value of an asset as recorded on a company's balance sheet, while fair value is the estimated value of an asset based on market conditions.

• Book value is based on historical cost and depreciation, while fair value is based on current market conditions.

• Book value is used for accounting purposes, while fair value is used for investment and valuation purposes.

• Book value may not reflect the true market val...read more