# How to Calculate a Valuation?

The formula is quite simple: business value equals assets minus liabilities. Your business assets include anything that has value that can be converted to cash, like real estate, equipment or inventory.

## How to Calculate a Valuation?

Calculating a valuation is a key step in the process of investing in a company. A valuation is an estimate of the company’s worth and can be used to help determine whether or not it is a good investment. The most accurate valuations are performed by experienced professionals, but for those who are new to the investment process, it can be helpful to understand the basics of how to calculate a valuation.

The first step in calculating a valuation is to determine the company’s earnings. This can be done by taking the company’s revenue, subtracting its expenses, and then subtracting any taxes that are owed. The resulting figure is the company’s net income or net profit.

The next step is to determine the company’s assets. This includes both tangible assets, such as property and equipment, and intangible assets, such as patents, trademarks, and customer relationships. Once the assets have been determined, their value must be calculated. This can be done by taking the current market value of each asset and subtracting any liabilities associated with it.

The third step is to determine the company’s liabilities. Liabilities include any debts or obligations the company has, such as loans, accounts payable