For firms with negative cash flows (generally during the capital expenditure mode), we can clearly not use the DDM and the FCFE for discounting cash flows. Relative valuation methods such as PE and EV/EBITDA also fail in the valuation of EBITDA negative companies. The most accepted methods of valuation in such companies are FCFF and P/B methods. In case of certain companies, innovative methods like P/Sales and P/Consumer, etc. are also used. Many a times loss making but asset heavy businesses are valued by SOTP method based solely on valuing their assets (such as land banks for some textile mills) on as-is basis.