Business valuation is a mix of art and science. The bottom line is, of course, that a business is worth what a buyer will pay for it. However, there are ways of estimating a fair price.
It is not uncommon to value a business by a number of different methods and use a weighted average that gives more weight to some methods than to others.  We will discuss several of those methods in this section in the coming months.
Note that there are a number of reasons for valuing a business other than buying or selling it. Businesses are valued for estate and tax purposes, divorce settlements, and for raising capital