nottheaverageactuary

Actuarial news and views from Cape Town and beyond

Asset-based Valuations

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This is a relatively simple article explaining how valuations are done using an ‘asset net liabilities’ approach.

The first method would be to use ‘book value’. It explains that the ‘book value’ shows a conservative estimate of a business’s assets due to accounting standards.  An adjustment would need to be made in this case e.g. to include goodwill.

The second asset-valuation method discussed is the liquidation approach.  This values whether the business is worth more continuing as is or closing the company and liquidating the assets.

https://www.valuationup.com/blog/2012/09/asset-based-valuation/

 

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