Valuation definition: Copy, customize, and use instantly
Introduction
The term "Valuation" refers to the process or methodology used to determine the monetary worth of an asset, business, or liability at a given point in time. It plays a critical role in financial, legal, and commercial transactions, ensuring that all parties have a clear understanding of the asset's value.
Below are various examples of how "Valuation" can be defined in different contexts. Copy the one that fits your needs, customize it, and use it in your contract.
Definition of "Valuation" as the fair market value
This definition ties "Valuation" to the fair market price.
"Valuation" means the estimated monetary worth of an asset, determined based on the price that a willing buyer and a willing seller would agree upon in an arm's-length transaction.
Definition of "Valuation" as a book value
This definition connects "Valuation" to accounting principles.
"Valuation" refers to the value of an asset as recorded in the company’s financial statements, calculated as the original purchase price minus any depreciation, amortization, or impairment costs.
Definition of "Valuation" as a discounted cash flow (DCF) calculation
This definition ties "Valuation" to future cash flow analysis.
"Valuation" means the monetary worth of an asset or business, calculated using the discounted cash flow (DCF) method, which projects future cash flows and discounts them to their present value.
Definition of "Valuation" as a liquidation value
This definition applies "Valuation" to distressed assets.
"Valuation" refers to the estimated monetary worth of an asset or business if sold in a liquidation scenario, assuming a limited time to find buyers and the need for immediate sale.
Definition of "Valuation" as a net asset value (NAV)
This definition ties "Valuation" to net assets.
"Valuation" means the total value of an entity’s assets minus its liabilities, calculated to determine its net worth or equity at a specific point in time.
Definition of "Valuation" as the appraised value
This definition focuses on independent appraisal.
"Valuation" refers to the monetary worth of an asset as determined by an independent appraiser or valuation expert, based on market conditions and asset-specific factors.
Definition of "Valuation" as an intrinsic value
This definition ties "Valuation" to inherent worth.
"Valuation" means the inherent monetary worth of an asset, business, or investment, based on fundamental analysis, such as earnings potential, market position, and economic conditions.
Definition of "Valuation" as a comparative market analysis (CMA)
This definition applies "Valuation" to market comparisons.
"Valuation" refers to the estimated value of an asset determined by comparing it to similar assets recently sold in the same market or industry.
Definition of "Valuation" as a going concern value
This definition ties "Valuation" to operational businesses.
"Valuation" means the monetary worth of a business as an ongoing entity, taking into account its ability to generate revenue and profits in the future.
Definition of "Valuation" as a replacement cost
This definition applies "Valuation" to cost estimation.
"Valuation" refers to the estimated monetary worth of replacing an asset with a new one of similar kind, quality, and functionality in current market conditions.
Definition of "Valuation" as a market capitalization
This definition ties "Valuation" to the stock market.
"Valuation" refers to the total market value of a publicly traded company, calculated by multiplying its current share price by the total number of outstanding shares.
Definition of "Valuation" as an enterprise value (EV)
This definition applies "Valuation" to business operations.
"Valuation" means the monetary worth of a business, calculated as the sum of its market capitalization, debt, and preferred shares, minus its cash and cash equivalents.
Definition of "Valuation" as a residual value
This definition ties "Valuation" to lease agreements.
"Valuation" refers to the estimated remaining worth of an asset at the end of its useful life or lease term, often used in equipment or vehicle leases.
Definition of "Valuation" as an income-based valuation
This definition connects "Valuation" to income generation.
"Valuation" means the monetary worth of an asset or business, determined by analyzing its income-generating potential, often using methods like the capitalization of income or gross income multiplier.
Definition of "Valuation" as a synergistic value
This definition applies "Valuation" to mergers and acquisitions.
"Valuation" refers to the additional monetary worth created when two companies combine, arising from cost efficiencies, increased market reach, or complementary operations.
Definition of "Valuation" as a forced sale value
This definition ties "Valuation" to distressed sales.
"Valuation" means the estimated monetary worth of an asset if sold under duress, such as a foreclosure or forced liquidation, typically at a lower price than fair market value.
Definition of "Valuation" as an adjusted present value (APV)
This definition focuses on debt-adjusted valuation.
"Valuation" refers to the monetary worth of an asset or project, calculated by adding the net present value (NPV) of expected cash flows to the tax benefits of debt financing.
Definition of "Valuation" as a cost approach valuation
This definition ties "Valuation" to replacement costs.
"Valuation" means the estimated worth of an asset, determined by calculating the cost to recreate or replace it, minus any depreciation or obsolescence.
Definition of "Valuation" as an equity value
This definition applies "Valuation" to shareholder interests.
"Valuation" refers to the monetary worth of a company’s equity, calculated by subtracting total liabilities from total assets.
Definition of "Valuation" as a future value projection
This definition ties "Valuation" to long-term forecasts.
"Valuation" means the projected monetary worth of an asset or business at a future date, based on anticipated growth, market conditions, and performance metrics.
Definition of "Valuation" as a goodwill valuation
This definition ties "Valuation" to intangible assets.
"Valuation" refers to the monetary worth attributed to a business's reputation, customer relationships, and brand equity, calculated as the excess of purchase price over net identifiable assets.
Definition of "Valuation" as an investment valuation
This definition applies "Valuation" to investment portfolios.
"Valuation" means the current monetary worth of an investment portfolio, determined by the aggregate market value of all securities and cash holdings within the portfolio.
Definition of "Valuation" as an opportunity cost valuation
This definition ties "Valuation" to economic choices.
"Valuation" refers to the estimated monetary worth of an asset, investment, or opportunity that must be forgone to pursue an alternative course of action.
Definition of "Valuation" as a social impact valuation
This definition applies "Valuation" to societal benefits.
"Valuation" means the quantified economic value of social benefits or impacts generated by a project, policy, or business activity, often used in sustainability assessments.
Definition of "Valuation" as a historical cost valuation
This definition ties "Valuation" to original costs.
"Valuation" refers to the monetary worth of an asset, recorded based on its original purchase price, without adjustments for market changes or depreciation.
Definition of "Valuation" as a comparative company analysis
This definition focuses on benchmarking valuation.
"Valuation" means the estimated monetary worth of a business, determined by comparing its financial metrics, such as revenue or EBITDA, to similar companies in the same industry.
Definition of "Valuation" as a terminal value calculation
This definition ties "Valuation" to perpetual growth assumptions.
"Valuation" refers to the monetary worth of a business or project at the end of a forecasted period, calculated by assuming perpetual growth of cash flows beyond that period.
Definition of "Valuation" as a market-clearing price
This definition applies "Valuation" to equilibrium pricing.
"Valuation" means the monetary worth of an asset or security at a price where the quantity supplied matches the quantity demanded in the market.
Definition of "Valuation" as an economic value-added (EVA) calculation
This definition ties "Valuation" to performance metrics.
"Valuation" refers to the monetary worth of an entity or investment, determined by calculating the surplus value created after accounting for the cost of capital.
Definition of "Valuation" as a tax-assessed value
This definition applies "Valuation" to tax purposes.
"Valuation" means the monetary worth of property or assets as determined by a tax authority for the purpose of calculating property taxes or other levies.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.