Valuation is the process of determining the current worth of an asset or a company. This can involve various methods, such as comparing it to similar assets, analyzing financial statements, or using discounted cash flow analysis. The goal is to establish a fair price that reflects the asset's true value in the market. In finance, valuation is crucial for investors, businesses, and analysts. It helps in making informed decisions about buying, selling, or holding assets. Accurate valuation can influence mergers and acquisitions, investment strategies, and even the overall economic health of a market or industry.