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Determination of the value of a company's stock based on earnings and the market value of assets.


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.


A process for calculating the monetary value of an asset. Valuation is subjective and results in wide disparities for the values of most assets.


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.


(1) The process of estimating the worth of something. (2) The estimated worth given to something.

References in periodicals archive ?
Big four global accounting firm whose services include Audit and Assurance, Business Consulting, Human Resources, Tax & Deals including Business Recovery Services, Corporate finance, Mergers & Acquisitions Advisory (buy and sell), Project Finance, Private Equity Advisory, Valuation Consulting, Tax valuations, Independent expert opinions, Accounting Valuations and more.
Since accounting valuations lack the full texture of an appraisal report, the attachment of a conditional statement is a bit more problematic for the accountant.
Accounting valuations must be adapted to allow like-for-like comparisons of scheme positions and to avoid the worst misrepresentations of the scheme's position on a spot-value basis.
In general, Karas approves the European Commission's proposals but points out the remaining need to deal with the issue of pro-cyclicality in capital adequacy rules and accounting valuations.

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