« Back to Glossary Index

A company valuation seeks to learn how much a company is worth. When you want to sell a company, you’d need to decide how much money you should ask for it. You’d consider things like how much of a product it sells, how popular it is and how much money the company makes. This helps you come up with a fair price. Assessors use different methods to understand the value of a company. One way is to compare it with similar companies that recently sold as a guide. Another way is to think about how much money the company could make in the future. This could then be used to calculate what that future profit is worth today. Investors and buyers use this information to decide if they’re getting a good deal or if the price is too high. A valuation will also assess the monetary value of intangible assets.