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valuation |
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Valuation Valuation The process of determining how much an asset, company, or anything else is worth. Valuation is highly subjective, but it is easiest when one is considering the current value of tangible assets. For example, determining how much a willing buyer will pay a willing seller for a house right now is easier than determining the value of what a company's brand recognition might be in 10 years. Valuation is important in fundamental analysis, the practitioners of which usually consider a company's earnings to be indicative of its value.
Valuation. Valuation is the process of estimating the value, or worth, of an asset or investment. Sometimes it means determining a fixed amount, such as establishing the value of your estate after your death. Other times, valuation means estimating future worth. For example, fundamental stock analysts estimate the outlook for a company's stock by looking at data such as the stock's price-to-earnings (P/E), price-to-sales, and price-to-book (net asset value) ratios. In general, a company with a high P/E is considered overvalued, and a company with a low P/E is considered undervalued. valuation (1) The process of estimating the worth of something. (2) The estimated worth given to something. Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content. |
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