In every stage of business it is very essential to have accurate and exact business valuation in order to plan accordingly. Valuation is a term to express the value of the different attributes of the business in respect of money while valuing the company's potential cash equivalents. The value of a company depends on the purpose of the valuation and the entity from whose point of view are elaborated awards. There are different methods and types of valuation of the company and its related parts. Valuing the company majorly occurred during the change of the ownership of the company or while complying the civil law or in other cases like inheritance, settlement of marital property, liquidation, merger and acquisition, valuation of shares etc.
In the process of business valuation are usually used by three internationally recognized valuation methods - income that is cash method, market comparison method and the method summary of assets. While evaluating the assets; we utilized all three methods, or a combination thereof, depending on the nature of the purpose of valuation.
Value of enterprise is a term subjected to the total invested capital that is defined as a functional combination of all of its related assets that included under the tangible assets including property, plant, equipment, intangible assets and working capital.
Value of the company including equity is in terms of buyers equals the differences of the total value of the above that defined the business value and long-term liabilities. In other words, the value of the company (equity) in terms of buyers defined as the difference between the value of total capital invested and the value of long-term liabilities (debt).
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