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Assets

Definition: The value of any tangible property and property rights owned by a company less any reserves set aside for depreciation. Assets don't reflect any appreciation in value unless they're sold for the greater value.

Profits aren't the only way to measure a company's success. You should also be aware of how much your company is worth. One way to do this is to examine your company's most updated balance sheet. That figure at the bottom for net worth, representing assets minus liabilities, is a good indicator of whether you've built value in your business--and if you have, how much.

Don't stop your valuation checkup with your balance sheet, though. There are a few other ways to measure value. One of the most important valuation techniques is based on expected future cash flow, or how much cash your company should be able to throw off for you or another owner in the next several years. Businesses are typically valued as a multiple of their future cash flows, but different industries and types and sizes of businesses use a variety of indicators. To find out what rule applies to your industry, check with your trade association

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