Definition of valuation

1. estimated worth or price.
2. act of estimating the worth of a thing. See also appraisal.

placing a value or worth on an asset. Stock analysts determine the value of a company's stock based on the outlook for earnings and the market value of assets on the balance sheet. Stock valuation is normally expressed in terms of price/earnings (P/E) ratios. A company with a high P/E is said to have a high valuation, and a low P/E stock has a low valuation. Other assets, such as real estate and bonds, are given valuations by analysts who recommend whether the asset is worth buying or selling at the current price. Estates also go through the valuation process after someone has died.

1. method of determining the worth of property to be insured, or of property that has been lost or damaged.
2. method of setting insurance company reserves to pay future claims.

1. estimated worth or price.
   Example: The valuation of the land is $100,000.

2. the act of estimating the worth of a thing.
   Example: The valuation was prepared in accordance with instructions provided by the tax assessor.