Valuation

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DEFINITION of '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.

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BREAKING DOWN 'Valuation'

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.

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