Next time you calculate a valuation on your equity, consider taking multiple paths. The different valuations could help re-enforce each other and give you more credibility to your audience.

So, what would be some of the different ways that you could value the equity?

1. Multiple of earnings or EBITDA. Take your most recent EBITDA earnings and the multiply it times a multiple that you think is realistic for your market. Alternatively, you could go several years out and then discount that number back to the present.

2. Multiple of revenues. In some situations a multiple of revenues would be a more accepted factor for the industry. You could do it based on your current revenues or, again, go several years out, determine the value, then discount it back to the present.

3. Product/Service lifetime value. This is a method you don’t see commonly use, but can be a very powerful way. What this does is look at lifetime value of certain products, service or customer classes. The calculation is covered separately.

4. Multiple of cash flow. Another approach could be to take a multiple of the cash flow being generated from operations generated several years out. This number too is discounted back to a present value.

Each of these four methods generates a terminal value of the company, what the company could be sold for several years out, discounted back to the present.

However, in some cases, there could be one other number to add in to each of these valuations, to come up with the total valuation for the company. This would apply in situations where the company will generate significant cash during the next several years that you are looking at. This cash generated, discounted back to the present, would be added to the terminal values calculated above.

This makes sense with how sales transactions work. Generally, the buyer does not pick up the cash on hand- that stays with the seller. You as the present owner should factor this into your valuation exercise.

That gives you four different methods for computing the value of your company. See how the four different values line up. If they’re pretty consistent, you have a basis, pretty strong base for the valutation. If one or two metrics seem way out of line, take a look, perhaps it could be a signal of an area that you need to strengthen to help out your company valution.

So when it comes time to value you’re equity, take a number of values for a better measure.