Valuation

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Valuation is the process of putting a price on a piece of property. The value of businesses, personal property, intellectual property (such as patents, trademarks, and copyrights), and real estate are all commonly determined through the practice of valuation. In the context of a business valuation, the appraiser considers many factors, including the following:

• Financial attributes (sales and profitability trends, noncash expenses, capital expenditures, tangible and intangible assets and liabilities, contracts, contingent liabilities, and others)
• Marketing attributes (location, competition, barriers to entry, distributor and supplier relationships, current demand for products or services offered, likely future profit potential for the business)
• General condition of the business and its assets (including state of bookkeeping, equipment, facilities, work environment, etc.)
• General economic factors in industry which the business operates (regulatory environment, labor relations, interest rates, consumer confidence, the stock market, etc.).