The objective of any management today is to maximize corporate value and shareholder wealth. This is considered their most important task. A company is considered valuable not for its past performance, but for what it is and its ability to create value to its various stakeholders in future.

Therefore, in analyzing a company, it is not sufficient just to study its past performance. We must understand the environment – economic, industrial, social and so on and its internal resources and intellectual capital in order to gauge its future earning capabilities.

It is therefore essential to understand that business valuation is important in determining the present status as well as the future prospects of a company, which in turn is important to understand how to maximize the value of a company. The creation and development of corporate value is the single most important long – term measure of the performance of a company’s management.