A company valuation can be required in a number of different scenarios. Generally speaking, a valuation need arises when a business’s ownership structure changes. This can be the case if the business is sold (and may be requested by both the buyer and the seller) or as part of a succession arrangement or a change of partners.
Here it is not just the company’s current financial situation that is taken into account, but various individual aspects, such as strategic corporate planning, future earnings prospects and risk evaluations. All these factors are then used to calculate a single monetary value.