Quick Definition

Business valuation is the process of determining the economic value of a business or company unit. It uses financial analysis, market trends, and asset values to estimate the worth of the business.

Examples

• 1A small business owner looking to sell their company needs a business valuation to set a fair price.
• 2Investors evaluating a startup for potential funding use business valuation to assess its worth.
• 3During a merger or acquisition, companies undergo valuation to determine the exchange ratio of shares.
• 4In divorce proceedings, business valuation can be crucial for asset division.

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