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Determination of the value of a company's stock based on earnings and the market value of assets.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.


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.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved


A process for calculating the monetary value of an asset. Valuation is subjective and results in wide disparities for the values of most assets.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.


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.

Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.


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

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.
References in periodicals archive ?
He said that improper valuation of imported items was becoming a source of promotion to under invoicing and smuggling.
Bill joins a steadily growing organization at First Valuation. As a nationwide real estate valuation services provider and appraisal management company, First Valuation has continued to expand its industry-leading technology to secure large lender clients and increase their market share.
You can find the Business Valuation SMA under the Business Performance Management research practice area.
Hold a "statement implementation meeting." A meeting of all firm valuation analysts (in person, if possible) to review the requirements of SSVS1 and to discuss the firm's procedures to implement the statement could contribute to improved communication and valuation practice consistency among the firm's members.
In this process, components attest to the fact that the information they provided during the initial valuation is accurate and make the relative assertions discussed later in this article.
Frank Piantidosi, chairman and chief executive officer of Deloitte FAS, said, "Avail's leadership and team of professionals have built a successful, growing business that is an excellent complement to Deloitte FAS' Valuation Services practice.
This item discusses the facts of Capital Blue Cross and the decision's significance as to the broader valuation issue.
In these instances, there is a need for a valuation expert who understands business valuation, intangible asset valuation and the relevant accounting pronouncements.
Tax Court ruled that because a parent retained too much control over the property in an FLP the valuation discount did not apply, a finding that subjected 100 percent of the assets to estate tax.
The fact that management uses significant judgment in the valuation process, particularly for level-3 estimates, adds to our concerns about reliability.
The new site also carries: the BIZCOMPS ($395) database of transactional information on "Main Street" businesses for the last ten years; FMV Restricted Stock Study ($499), a new tool for quantifying marketability discounts; and, Valuation Advisor's Lack of Marketability Discount Study ($399), a new empirical tool for determining the marketability discount in business valuations.