Introduction to Valuation
Valuation is the process
of determining the present value (PV) of an asset. Valuations can be done on
assets (for example, investments in marketable securities such as stocks,
options, business enterprises, fixed assets
or intangible assets such as patents and trademarks) or on 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, secured lending, collateral security, taxable events to
determine the proper tax liability, and in litigation etc.
