The process of determining the economic value of a business or company. Business valuation can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership and divorce proceedings. Often times, owners will turn to professional business valuators for an objective estimate of the business value.
The field of business valuation encompasses a wide array of fields and methods. The tools and methods can vary between valuators, businesses and industries. Common approaches to business valuation include review of financial statements, discounting cash flow models, and similar company comparisons.
On EquityNet, there are two pre-money valuations in our Business Plan Analysis, the valuation that the entrepreneur entered and the valuation that the EquityNet software calculates.
EquityNet's Enterprise Analyzer estimates business valuation based on 3,000+ private and public market ratios and factors. Proprietary valuation correlations for each specific sector are incorporated into a discounted cash flow model that is adjusted dynamically based on comparable rates of return within EquityNet’s real-time peer benchmarking database.
EquityNet also provides a valuation calculator that can help you estimate and better understand your business valuation. The results are based on real market data gathered by EquityNet from over 3,000 businesses across North America. The educational questions were chosen from the wide-ranging list of questions used to determine a more precise business valuation calculation in EquityNet’s patented business planning and analysis software, Enterprise Analyzer™. Click here if you'd like to try out the calculator.