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Finance Formulas / July 19, 2018 / Aniyah Booth

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.

This ratio measures the financial leverage of a company. Companies with higher levels of liabilities compared with assets are considered highly leveraged and more risky for lenders.

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