Liquidation Value Method: When To Use When Valuing a Company
Consider using the Liquidation Value Method (as opposed to the Net Asset Value Method) when valuing a company if the:
- The liquidation value is an appropriate definition of value 10/’ the company being valued.
- The ownership interest being valued is either has a controlling interest or has the ability to cause the sale of the company’s assets.
- The company is in bankruptcy or there Is substantial doubt about the company’s ability to continue as a going concern.
- The company’s current and projected cash flows from continuing operations are low compared to its net assets.
- The company may be worth more “dead” than “alive.”
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC, a middle-marketing M&A and capital advisory firm. Nate works with corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He holds Series 79, 82 & 63 FINRA licenses and has facilitated numerous successful engagements across various verticals. Four Points Capital Partners, LLC a member of FINRA and SIPC. Nate resides in Seattle, Washington. Check the background of this Broker-Dealer and its registered investment professionals on FINRA's BrokerCheck.
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Nate Nead
Nate Nead is a licensed investment banker and Principal at Deal Capital Partners, LLC, a middle-marketing M&A and capital advisory firm. Nate works with corporate clients looking to acquire, sell, divest or raise growth capital from qualified buyers and institutional investors. He holds Series 79, 82 & 63 FINRA licenses and has facilitated numerous successful engagements across various verticals. Four Points Capital Partners, LLC a member of FINRA and SIPC. Nate resides in Seattle, Washington. Check the background of this investment professional on FINRA's BrokerCheck.