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What is Business Valuation?
Home » Accounting » Business Valuation » What is Business Valuation?Business Valuation is a process used to determine the value of a business, company or corporation in dollar amount by a process of estimation, by a qualified appraiser, regarding the company’s present and future outlook.
Thus, Business Valuation is both cold calculation and artistic estimation. Most individuals see Business Valuation as a black and white, not gray, issue: a business is worth what a buyer will pay for it. This train of thought can immediately leave to dishonesty and deception if the seller of a business expects the business’s worth to dramatically drop immediately following the purchase of their business.
So because of this reality, another conceptual idea and methodology of business valuation is commonly used in order to ensure and estimate a fair price.
There are variations of these methods and since every business is unique and different, so are the methods that a business can use to estimate value for any and all specific situations. Usually, more than one method is used during the Business Valuation process in order to establish a median of value and in an effort to display credibility.
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