Liquidation Value
Definition
What is Liquidation Value?
The estimated net amount available if assets are sold and liabilities paid.
Example in practice
How This Looks in Practice
A distressed investorA person or organisation that commits capital with the expectation of a financial return. compares the share priceThe market price at which one share is quoted or traded. with liquidationThe process of selling an entity's assets, paying creditors, and distributing any remainder to owners. value.
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Related Terms
Market Value
The price at which an asset could trade in the market at a given time.
ValuationIntrinsic Value
An estimate of an asset's underlying economic worth based on expected cash flows, assets, or earning power.
ValuationFair Value
An estimate of an asset's appropriate value under specified assumptions or accounting standards.
Capital BudgetingNet Present Value
Present value of expected cash inflows minus present value of expected cash outflows.