[val-yoo-ey-shuh
n] 
| 1. | the act of estimating or setting the value of something; appraisal. |
| 2. | an estimated value or worth. |
| 3. | the awareness or acknowledgment of the quality, nature, excellence, or the like of something: public valuation of the importance of education. |
| val·u·a·tion (vāl'yōō-ā'shən) n.
|
Valuation
The process of determining the current worth of an asset or company. There are many techniques that can be used to determine value, some are subjective and others are objective.
Investopedia Commentary
For example, an analyst valuing a company may look at the company's management, the composition of its capital structure, prospect of future earnings, and market value of assets.
Judging the contributions of a company's management would be more of a subjective valuation technique, while calculating intrinsic value based on future earnings would be an objective technique.
Related Links
Introduction to Fundamental Analysis
Guide to Stock-Picking Strategies
Digging Into The Dividend Discount Model
See also: Analyst, Asset Valuation, Capital Structure, Earnings, Fundamental Analysis, Intrinsic Value, Market Value, Overbought, Oversold
valuation