Balance Sheet Value: Assets at Work

Balance Sheet Value: Assets at Work

Pure value investing starts with the balance sheet, the list of assets and liabilities, and the resulting difference called book value.

The following metrics can be derived:
· Net-net working capital
· Net asset value
· Liquidation value, and
· Reproduction cost

In some areas, our economic environment has outpaced our accounting principles so that sizable asset classes called intangibles bearing large values remain unrecorded on the asset side of a balance sheet.

Examples are:
· Intellectual property (copyrights, patents, and trademarks), and
· Human capital (a well-trained workforce, know-how, and specialized skill sets).


Also read:
1.Balance Sheet Value: Assets at Work
2.Reliability of financial data
3.Asset valuation approach in liquidation
4.Asset valuation approaches in active companies
5.Valuing Hidden assets
6.Subtracting liabilities in asset valuation
7.Balance Sheet Value: Summary