# Income Approach Gdp Formula Expenditure Calculation Methods What National Capitalization Definition Method Gnp Appraisal Direct Equation Gross Domestic Product Operating Are

Finance Formulas / July 19, 2018 / Kenley Hopper

## Labor Efficiency Variance Formula

### Cash Flow To Creditors Formula

#### Sales Formula

##### Present Value Formula
###### Principal Interest Formula

Business valuation is the process of determining the economic value of a business or company. Business valuation can be used to determine the fair value of a business for a variety of reasons, including sale value, establishing partner ownership and even divorce proceedings. Owners will often turn to professional business valuators for an objective estimate of the value of the business.

Consider the following example to illustrate the concept. Assume hypothetical company BigBox has operating income or earnings before interest and taxes (EBIT) of \$100 million in Year 1, with interest expense of \$10 million, and has 100 million shares outstanding. (For the sake of clarity, let’s ignore the effect of taxes for the moment.)

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