This is fundamental technique of valuation which is based on the principle that the value of an asset will depend on the expected cash flows which the asset will generate in future.
Similarly the value of company will depend on all cash flows which the company will generate in the foreseeable future. DCF valuation gives the intrinsic value of the company which is equal to present value of those cash flows.
Assuming other factors constant, higher cash flows will give higher intrinsic value and lower cash flows will lower intrinsic value.
This technique is based on the principle that similar asset should have similar value. So similar companies should have similar price.
In this technique, the value is derived based on the multiples of comparable companies. There are two types of multiples: Equity Multiples & Enterprise Value Multiples.
Equity Multiples: P/E , P/BV, P/ CF, P/ Sales
Enterprise Value Multiples: EV / Revenue, EV / EBIT, EV/ EBITDA, EV / Cash Flows
In this technique, the value of a focus company is derived based on the multiples of comparable acquired companies in the recent past in the same sector and domain of focus Company.
Here the difference between, Relative valuation & Transaction valuation is companies. In RV you are considering current multiples of companies which have not been acquired where as in TV you are looking at historical multiples of those companies which have been acquired.
There are offer price (Equity) multiples and transaction value multiples:
Offer Price / Sales, Offer Price / EPS, Offer Price / CF, Offer Price / BV
Transaction Value / Sales, Transaction Value / EBIT , Transaction Value / EBITDA, Transaction Value / Cash Flows