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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 ?
However, valuation prices of imported items were not being fixed properly, which was leading unrest among all stakeholders.
* The statement allows for two types of engagements: the valuation engagement and the calculation engagement.
POCs are currently updating program data (budgeted cost, useful life, etc.); asset status (additions, transfers, and disposals); and program expenditures from the initial valuation. Here's a description of each of the required updates.
The value of the facade preservation easement donation is usually determined by applying the "before and after" valuation approach.
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.
These disclosures might include key drivers affecting valuations, fair-value-range estimates, and confidence levels.
A certification is evidence of appraiser's competence in performing business valuations. It shows the appraiser's commitment and seriousness to being a leader of their discipline, rather than just holding business valuations out as yet another service offering.
For the multilines, the analysis found the valuation effect of lowered asset base and reduced earnings associated with divesting an entire line of business is likely to be substantially offset by the "valuation premium" gained from achieving greater business concentration.
The "residual method" starts off by valuing the easiest assets, leaving the more judgmental valuations for latter in the process.
Alerding is a partner and chairman of the Valuation and Forensic Services Group at Clifton Gunderson LLP in Indianapolis.
The IRS will receive an accurate valuation from the Basis100 web-centric valuation solutions which include a property's estimated highest and lowest reasonable value, the two most recent sale dates and prices, the last assessed value on the home and comparable sales information for three additional neighborhood properties.