As the name suggests, valuation is the process of determining the current value or current worth of an asset, company, or investment. This assessment can be conducted using different methods such as market value, income-based approaches, or asset-based analysis. Valuations are essential for various financial activities, including mergers, acquisitions, investment analysis, and tax reporting. Accurately determining value helps investors and stakeholders make informed decisions. For companies, valuations can affect their stock price, loan eligibility, or merger potential.