- Valuation is the quantitative process of determining the fair value of an asset, investment or firm.
- Generally, a company can be valued on its own on an absolute basis or on a relative basis compared to other similar companies or assets.
- There are several methods and methods of evaluation, each of which can give a different value.
- Estimates can be quickly affected by corporate earnings or economic events that force analysts to readjust their valuation models.
- Although quantitative in nature, evaluation often involves some degree of subjective input or assumptions.