Definition:
The valuation of a business is the process of determining the current worth of a business, using objective measures, and evaluating all aspects of the business. A business valuation might include an analysis of the company's management, its capital structure, and its future earnings prospects, as well as the market value of its assets.
Typical Business Valuation Report
A typical business valuation report includes:
- Assumptions and limiting factors
- The standard of value used to create the valuation (fair market value or other standard)
- The date of the valuation
- The economic outlook for the area
- The industry outlook, growth prospects, and potential threats and opportunities
- An overview of the business
- More on valuation methods, weighting, and other factors
- The financial data showing the valuation.
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