ELE 2 –
Valuation Concepts and
Methodologies
BSA 3-1
Week 3 November 17, 2021
Liquidation Based
Valuation
LIQUIDATION BASED VALUATION
Learning Objectives:
1.Differentiate the valuation
2.Describe the going concern and liquidation concern asset based
3.Illustrate the capitalizing and discounted future
Liquidation Value refers to the value of a company if it were dissolved
and its assets are sold individually. Liquidation value represents the
amount that can be gathered if the business is shut down and its
assets are sold piecemeal. In some texts, liquidation value is also
known as net asset value.
Liquidation value is the base price or the floor price for any firm
valuation exercise. Liquidation value should not be used to value
profitable or growing companies as this approach does not consider
growth prospects of the business.
