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it can be calculated with this formula
Value of Business= Market Value of Debt + Market Value of Equity
Value of business can be defined in various ways.
One can say the value of business as simply Market Value of Debt+Market Value of Equity.
It can also be defined as the Present value of future cash flows which the firm is expected to make, discounted at the Weighted Avg Cost of Capital.
In Finance Value of the Business means Enterprise Value
Value of business has a special meaning if it relates with "equity" of the business. It can be calculated in3 ways:
a. Book value of equity (not much useful)
b. Break up value: It assumes the company is not a going concern. Its assets are valued in the market to pay off all liabilities and the remaining is the break up value.
c. Going Concern or market value: You have to determine next5 years cash flows (FCFE), estimate the terminal value and then discount all future cash flows plus Terminal Value, to arrive at the present value of the equity. The discount rate is cost of equity.
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