The Capitalisation of Earnings Method is a business valuation method under the income approach. Under this method, business valuation analysts review and compute the most recent economic benefits (earnings) for a representative single-period which is converted to fair market value through division by an appropriate capitalisation rate. The capitalisation rate is the multiple or divisor used to convert anticipated economic benefits (adjusted income) of a single period into fair market value and typically contains all risk elements. The Capitalisation of Earnings Method is also referred to as the capitalisation method or the income capitalisation of earnings method. The capitalisation rate can be derived from the Ibbotson Build-Up Method as: