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.
Investopedia explains '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.