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In finance, valuation is about putting a price tag on anything. From companies to financial assets, valuation main aim is to use a consistent procedure that allows to build up a model, which is supposed to encapsulate the "real value" of a company or financial asset. Practitioners use a specific toolbox for valuation. In finance, valuation is the process of estimating what something is worth. Items that are usually valued are a financial asset or liability. Valuations can be done on assets or liabilities (e.g., bonds issued by a company). Valuations are needed for many reasons such as investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability, and in litigation. Keep in mind that although Valuation is often presented as a scientific framework, it is often more of art. In fact, the business world is extremely complex. What valuation does is to reduce that complex by creating financial models. Those financial models are based on assumptions. Those assumptions work like a foundation. Therefore, if the assumption turns out wrong, the whole model collapses. By keeping this in mind, financial models are just rough representations of the real world, but at times they can also become misrepresentation. One financial discipline that deals with valuation is corporate finance. Corporate finance uses a series of financial and statistical tools to five the financial manager a framework to make sound decisions. If those tools are often helpful. Other times they can turn against the financial professional when he does not take into account that those tools are not perfect.

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  • Valuation (finance) (en)
  • What is valuation? (en)
  • financial valuation (en)
  • valuation (en)
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  • Valuation (finance) (en)
  • What is valuation? (en)
  • financial valuation (en)
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  • In finance, valuation is about putting a price tag on anything. From companies to financial assets, valuation main aim is to use a consistent procedure that allows to build up a model, which is supposed to encapsulate the "real value" of a company or financial asset. Practitioners use a specific toolbox for valuation. In finance, valuation is the process of estimating what something is worth. Items that are usually valued are a financial asset or liability. Valuations can be done on assets or liabilities (e.g., bonds issued by a company). Valuations are needed for many reasons such as investment analysis, capital budgeting, merger and acquisition transactions, financial reporting, taxable events to determine the proper tax liability, and in litigation. Keep in mind that although Valuation is often presented as a scientific framework, it is often more of art. In fact, the business world is extremely complex. What valuation does is to reduce that complex by creating financial models. Those financial models are based on assumptions. Those assumptions work like a foundation. Therefore, if the assumption turns out wrong, the whole model collapses. By keeping this in mind, financial models are just rough representations of the real world, but at times they can also become misrepresentation. One financial discipline that deals with valuation is corporate finance. Corporate finance uses a series of financial and statistical tools to five the financial manager a framework to make sound decisions. If those tools are often helpful. Other times they can turn against the financial professional when he does not take into account that those tools are not perfect. (en)
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  • Valuation (finance) (en)
  • financial valuation (en)
  • valuation (en)
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