Business valuation is the process of determining the economic value of a business or company. This assessment is crucial for various reasons, including mergers and acquisitions, investment analysis, and financial reporting. Valuation methods can include approaches like the income approach, market approach, and asset-based approach, each providing different insights into a company's worth. The outcome of a business valuation helps stakeholders make informed decisions. For example, potential buyers can gauge whether a business is worth the asking price, while owners can understand their company's financial health. Accurate valuations are essential for investors, creditors, and business owners alike.