Business Valuation refers to the process of determining the value of a business asset. It is a determination of the current market value of economic assets as money. In other words, it can be defined as the appreciation and estimation of the value of an organization’s total assets such as current assets (like inventory), fixed assets/non-current assets (like lands, buildings, properties, machinery, plant, equipment, and vehicles) and intangible assets (like goodwill and other intangible assets). Valuation is to investigate to what extent a fixed asset, intangible asset, or service provides the expected benefit from them and to give an opinion about their properties in order to determine their value.
Business valuation is an integral part of effective planning and is a great start towards sustaining an organization’s success. It is very important to know the value of an organization and further determine the factors affecting the value which helps identify and make correct and effective business decisions. For this reason, company evaluation has become an important issue for the sustainability of an organization.