What is 'Done Deals' used for in the context of business valuation?

'Done Deals' refers to a collection of completed transactions used in the context of business valuation, particularly within the market approach. This methodology relies on real sales data from businesses that have been sold to assess the value of similar businesses. By analyzing these transactions, valuators acquire insights into market trends, pricing, and buyer behavior, which form the backbone of establishing a fair market value for the business being appraised.

In this context, the market approach is centered around the principle of substitution—meaning that a buyer would not pay more for a business than it would cost to acquire a similar one in the marketplace. Using 'Done Deals', appraisers can compare transaction prices to develop a valuation based on recent and relevant market activity. This technique allows for a practical and empirical approach to valuing businesses by grounding estimates in actual sale prices, making the valuation process more robust and reflective of the current market conditions.

The other options refer to different aspects of business valuation that do not specifically leverage transaction data from completed sales for valuation purposes.