By Keiter CPAs
Greg Saunders shares insights on the Capitalized Cash Flow Method when valuing small businesses
On September 9, 2025, Keiter Valuation and Forensic Services Senior Manager, Greg P. Saunders, CPA/ABV/CFF, ASA, joined Jim R. Hitchner, CPA/ABV/CFF, to present at the VPS StraightTalk Webinar on the topic Best Practices: Valuing Small Businesses – The Capitalized Cash Flow Method. The two-hour session drew valuation professionals eager to refine their skills in valuing small businesses.
Webinar overview
The program explored the complexities of valuing small businesses, focusing on when and how to apply the Capitalized Cash Flow Method (CCF) method versus the Discounted Cash Flow (DCF) approach. Hitchner and Saunders guided attendees through key decision points, illustrating with a detailed case study and practical report language. Participants gained insight into the strengths, limitations, and defensibility of the CCF method in a variety of contexts, including litigation, tax, and transactional engagements.
Learning objectives
Using a detailed case study (including report language), participants learned:
- Best practices in applying the CCF method
- How to defend the method in reports and testimony
- How to select the proper level of reliability for this approach
Why the CCF method matters
The presenters emphasized that valuing small businesses presents unique challenges compared to larger enterprises. Limited financial information or heavy owner involvement in financial projections can make the DCF method difficult to apply and defend. In such cases, the CCF method may provide a more credible alternative.
By focusing on normalized, sustainable cash flow and applying an appropriate long-term growth rate and discount rate, appraisers can arrive at reliable conclusions of value that withstand scrutiny in litigation, tax, and transactional settings. Knowing when to apply the CCF method is a key skill for valuation professionals.
Professional considerations
As valuation methods frequently face scrutiny in disputes and audits, Hitchner and Saunders stressed the importance of transparent assumptions and rigorous documentation. Courts and regulators are more likely to accept the CCF method when it is supported by thorough analysis and clearly explained in valuation reports. Weak or inconsistent applications, by contrast, risk being challenged or dismissed.
Greg has performed and/or assisted with over 450 valuation and forensic engagements and has served clients in a variety of industries. He is a frequent speaker and writer on valuation and forensic accounting topics.
Interested in a valuation for your small business? Contact our Business Valuation Services team | Email | Call: 804.747.0000
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Keiter CPAs
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