How to value a Business?
Valuing a business is a science as well as an art. Before starting the valuation exercise, the very first step is to look into the economy of the geography in which it is operating, then the Industry in which the company falls and then finally the company itself i.e. the top down approach. The company is a constituent of an industry and then of the economy in which it falls as the valuation of the company vary from industry to industry and from geography to geography. Two companies with the same top line and the same bottom line may get very different business valuation if there industry segment is different as the market multiple of the two company may vary significantly.