2 min read
Definition
A valuation estimates the current worth of an asset, security or whole business. Common approaches are market comparison, the income (or discounted cash flow) method, and asset-based valuation.
In plain terms
Different methods can give very different answers, which is why the basis of a valuation matters as much as the number. A forced-sale value is far below a going-concern value.
Why it matters for your company
Lenders lend against realistic, often conservative, valuations — the gap to book value drives the haircut. For deals, a defensible valuation underpins the price. See enterprise value.
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Haircut (lending)
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Net Present Value (NPV): What It Means for Business Finance
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.