What is the meaning / definition of  in the hospitality industry?

The term  describes the process of assessing a ’s or asset’s economical worth. This is done by evaluating the structure of capital, market value of assets and prospects of future earnings. Often Valuations are required when a business owner wants to prepare their company for sale, ensure financial viability towards potential investors or to establish value of shares. Valuations are often done by accountants, asset managers, certified valuers, business advisors, real estate agents or merger and acquisitions specialists.

The value of a business relies on several points:

  • Time concern – Value in continued use as an ongoing operating business enterprise.
  • Array of assets – Value of assets in place but not used to conduct business operations.
  • Orderly disposition – Value of business assets in exchange, where the assets are to be disposed of individually and not used for business operations.
  • Liquidation – Value in exchange when business assets are to be disposed of in a forced liquidation

Below are several  methods:

  •  Analysis
  • Precedent Transactions
  • Comparable Analysis

See Also:


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