Firm value refers to the total worth of a company, often assessed through its market capitalization, which is calculated by multiplying the current share price by the total number of outstanding shares. It reflects the company's financial health, growth potential, and overall performance in the market. Investors and analysts use various methods to evaluate firm value, including discounted cash flow analysis and comparable company analysis. Understanding firm value helps stakeholders make informed decisions regarding investments, mergers, and acquisitions, as it provides insight into the company's profitability and future prospects.