Sunday 18 September 2011

Finance for Managers: Asset-Based Valuations - Liquidation Value

Liquidation value is similar to adjusted book value.  It attempts to restate balance-sheet values in terms of the net cash that would be realized if assets were disposed off in a quick sale and all liabilities of the company were paid off or otherwise settled.  This approach recognizes that many assets, especially inventory and fixed assets, usually do not fetch as much as they would if the sale were made more deliberately.  

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