In short, when you need to make an important business decision that involves the value of your business, a business valuation should be done. Using an incorrect value can lead to ill-informed decision making in regards to acquisitions, ESOP, dispute resolutions and even tax filing.

CBV is the abbreviation for Chartered Business Valuators. They are valuation experts and specialists that are trained to assess and value private and public firms through various ways such as tangible and intangible assets, quantifying profitability and future cash flows.

CBVs make use of a variety of valuation methods and take into account capital, IP, brand value, management, prior performance, employees and many more aspects to arrive at a conclusion. CBVs provide fair value, have expertise in the field due to their rigorous training and provide valuations based on numerous factors and by looking at the bigger picture.

There are a variety of “standards of value” which are used for business valuation and these depend on the intended use of the valuation. Some of them are Fair market value, Fair value and investment value.

The different types of valuations are

• Asset Valuation: This evaluation accounts for all tangible and intangible assets of the company. The market value of those assets then helps determine your business’ worth.
• Historical earnings valuation: In this method, your business valuation is derived from the value placed on the goodwill over and above the market value of your assets. It assumes that
  Your business’s history will help predict its growth in the future.
• Relative valuation: It is a valuation method that assumes the value of a similar business being sold. It makes a comparison of your business’s assets to the value of a similar business’s assets and arrives at a valuation or asking price.

Some other methods of valuation include Future Maintainable Earnings Valuation and Discounted Cash Flow Valuation.