The process of determining the value of an asset or company is called valuation. Valuations can be done on assets (investments in marketable securities such as stocks, options, business enterprises, or intangible assets such as patents and trademarks) or on liabilities (bonds issued by a company). It is the procedure of determining the current worth of an asset or a company. It is an estimate of how much business, property, antique or any asset is worth.
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. In finance, valuation analysis is required for many reasons including tax assessment, wills and estates, divorce settlements, business analysis, and basic bookkeeping and accounting. In the world of business and finance, items that are usually valued are financial assets, such as stocks, options, commercial enterprises, patents, or trademarks.