The business valuation is necessary for various reasons- for presenting before the investors, as a document in a lawsuit, inheritance, calculating the sale made by the business, exit of a partner, making public offers, or authentication of the net worth.
Primarily there are three approaches for the business valuation:
The choice of method is essential. Therefore, while choosing the method, the factors that influence the choice of the method are as follows:
There are multiple methods of value estimation. The final value is divided into the average for the purpose. The only rule applicable at the time of valuation is that to calculate the valuation, it is necessary to use common sense and intuition to understand the requirement of the inputs so that it passes the acceptability test at the time of issuing the valuation report.