Valuation is the process of determining the worth or value of an asset, business, or investment. This can involve various methods, such as comparing it to similar assets or using financial metrics. For example, when valuing a company, analysts might look at its earnings, market position, and growth potential to estimate how much it should be worth. Understanding valuation is crucial for investors and business owners alike. It helps them make informed decisions about buying, selling, or investing in stocks or real estate. A proper valuation can reveal whether an asset is overvalued or undervalued, guiding strategic financial choices.