Valuation is the process of determining the current worth of an asset, company, or investment using various methods such as discounted cash flow analysis, comparable company analysis, or price-to-earnings ratios. Accurate valuation is critical for investors to make informed decisions, whether they are considering buying, selling, or holding an asset. Valuation plays a key role in mergers and acquisitions, stock analysis, and portfolio management, helping investors assess whether an asset is overvalued, undervalued, or fairly priced.