Introduction

Valuation is the process of determining the worth of an asset or company. Valuation is

important because it provides prospective buyers with an idea of how much they should pay
for an asset or company and for prospective sellers, how much they should sell for.

Summary

Valuation is the analytical process of determining the current (or projected) worth of an asset
or a company. There are many techniques used for doing a valuation. An analyst placing a value
on a company looks at the business's management, the composition of its capital structure, the
prospect of future earnings, and the market value of its assets, among other metrics. Valuation
is a quantitative process of determining the fair value of an asset, investment, or firm. In
general, a company can be valued on its own on an absolute basis, or else on a relative basis
compared to other similar companies or assets.

Explanation

Valuation refers to the process of determining the present value of a company, investment or

an asset. It can be done using a number of methods, as described below. Analysts who want to
place a value on an asset normally look at the prospective future earning potential of that
company or asset.

Opinion/Recommendation

The topic of business valuation is frequently discussed in corporate finance. Business valuation
is typically conducted when a company is looking to sell all or a portion of its operations or
looking to merge with or acquire another company. The valuation of a business is the process of
determining the current worth of a business, using objective measures, and evaluating all
aspects of the business.

References

https://www.investopedia.com/terms/b/business-valuation.asp