Liquidation Value


DEFINITION of 'Liquidation Value'

The total worth of a company's physical assets when it goes out of business or if it were to go out of business. Liquidation value is determined by assets such as the real estate, fixtures, equipment and inventory a company owns. Intangible assets are not included in a company's liquidation value. Intangible assets include a business's intellectual property, goodwill and brand recognition.

BREAKING DOWN 'Liquidation Value'

If a company were to be sold rather than liquidated, both liquidation value and intangible assets would be considered to determine the company's going-concern value. Value investors will look at the difference between a company's market capitalization and its going-concern value to determine whether the company's stock is currently a good buy.
Liquidation value can also refer to the cash value of a single asset.

  1. Times Revenue Method

    A valuation method used to determine the maximum value of a company. ...
  2. Voluntary Liquidation

    A corporate liquidation that has been approved by the shareholders ...
  3. Cash Liquidation Distribution

    The amount of capital that is returned to the investor or business ...
  4. Forced Liquidation

    An action taken by brokerage houses that offsets and closes all ...
  5. Liquidation

    1. When a business or firm is terminated or bankrupt, its assets ...
  6. Going Concern

    A term for a company that has the resources needed in order to ...
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