When you start a valuation we ask whether the entity trades or holds assets. It is a short question with a large effect on how the business is valued.
A trading business
A trading business sells goods or services. Its value usually rests on what it earns: what a normal year's profit looks like, and what a buyer would pay for that profit in future. The financial statements, and anything unusual in them, matter most.
An asset-holding entity
An asset-holding entity owns property, shares or other investments, and may do little else. Its value usually rests on what it owns, less what it owes. The values of the assets themselves matter most, and the information request asks about them.
When it is not clear-cut
Some entities do both, such as a company that runs a business from a property it owns. Choose the description that fits best when you start. The valuation report sets out the method used and why, so a reader can see how the entity was treated.