Valuation Definition

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Definition Of Valuation:

1. General: Appraising or estimating the worth of something having economic or monetary value.
2. Insurance: Determination of the worth of the asset to be insured or that which has been damaged or lost. 3. International trade: Determination of the dutiable value of imports by the customs authorities. The GATT (now WTO) Customs Valuation Code obligates the signatory governments to use the transaction value (actual price paid by the importer to the exporter) as the principal basis for imposing duties. Where transaction value cannot be used, the secondary basis of value, such as transaction value of identical or similar merchandise, computed value, or deductive value may be used. 4. Securities: Placing a value on a stock based on the market value of the issuer's assets and the outlook for its earnings. Valuation is usually expressed as a Price/Earnings ratio (P/E).Other definition of Valuation- The process of determining the current worth of an asset or company. There are many techniques that can be usedto determinevalue,some are subjective and others are objective.For example, an analyst valuing a company may look at the company's management, the composition of its capital structure, prospectof future earnings, and market value of assets.Judging the contributions of a company'smanagement would be more of a subjective valuation technique, while calculating intrinsic value based on futureearnings would be an objective technique.

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