The etymology of “business” refers to the state of being busy, in the context of the individual as well as the community or society. In other words, to be busy is to be doing commercially viable and profitable work.
In economics, business is the social science of managing people to organize and maintain collective productivity towards accomplishing particular creative and productive goals, usually to generate profit.
With some exceptions, (such as cooperatives, non-profit organizations and (typically) government institutions), in predominantly capitalist economies, businesses are formed to earn profit and to maximize the personal wealth of their owners.
The dictionary meaning of “Valuation” is “The act or process of assessing value or price”. Business valuation is the act or process of assessing value or price of financial asset or liability. Financial valuation involves valuation of assets as well as valuation of the complete business.
A business valuation determines the value of a business enterprise or ownership interest. A valuation estimates the economic benefits that arise from combining a group of physical assets with a group of intangible assets of the business as a going concern. When valuation is done with the purpose of merger or purchase, it estimates the price that prospective informed buyers and sellers would negotiate at arms length for an entire business or a partial equity interest. The methods used for the purpose usually depend upon purpose. The theoretical valuation arrived at has to be perfected with market criteria, as the final purpose is usually to determine potential market prices
Team of professional undertakes exhaustive research on business venture and makes precise valuation.