Is a business valuation part of due diligence?

If you are wondering whether the two come as a package, note that the sources cited here treat them as different things. BDC describes due diligence as the buyer’s review of the target, and CBV Institute defines a valuation as the process of developing an opinion or conclusion of value. This page explains the difference. It does not say what any business is worth.

What due diligence is

BDC says due diligence gives crucial information on a target’s finances, prospects and legal issues, and lets a buyer test initial expectations and look for major red flags. BDC also says the vendor provides commercial, financial, legal and other information so the buyer can understand how the business works, and says the review lets a buyer confirm that the initial valuation and letter of intent still make sense. BDC’s wording refers to an “initial valuation” made before the review.

What a valuation is, and who gives one

CBV Institute’s glossary defines valuation as the act or process of developing an opinion or conclusion of value at a valuation date. BDC, writing for owners selling a business, says it is helpful to hire a chartered business valuator, and says valuations can be done with varying levels of detail. CBV Institute says its updated Practice Standards cover three levels of conclusion: Calculation, Estimate and Comprehensive. They apply to engagements beginning on or after January 1, 2026. Ask a valuator which level you are buying and what it covers. For credentials, see how to find a business valuator in Canada.

How the two can connect

CBV Institute says that, under those standards, the scope of work for every level consists of review, inquiry, analysis and independent corroboration of significant relevant information about the business, its industry and other relevant factors. If you want a valuation, ask the valuator which information they would need from you, and whether any of what you learned in diligence is something they would review or test themselves. For what the findings do to a deal, see what a diligence finding actually does to a deal.