Answer: Valuation is the process of determining the current value of a company its assets and its investments. valuations can help in deciding what projects a company should invest in.
Explanation: Valuation is an important exercise to determine the current value of a company and it can be done for various reasons such as:
1. Buying or selling the business: Both buyers and sellers have differences in the value of a company.
2. Strategic planning: a company should invest in only those projects which have better net value and they need planning to do that.
3. Capital financing: when a company's worth is properly documented it is easier for the investors and banks to lend money and negotiate with them.
4. Securities investing: Investing in security, like bonds shows that the intrinsic value is not the same as market value.