Modified Book Value


DEFINITION of 'Modified Book Value'

An asset-based method of determining how much a business is worth by adjusting the value of its assets and liabilities according to their fair market value. This technique also includes the value of all of the business's intangible assets and liabilities, such as goodwill and pending litigation.


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BREAKING DOWN 'Modified Book Value'

Liquidation value and replacement value are two other asset-based valuation methods. Businesses are also commonly valued using market multiple methods, capitalization rates, excess earnings or discounted cash flow. Companies that specialize in business valuation can be hired to determine a business's value for a number of purposes, including a merger or acquisition, shareholder transaction, estate planning and financial reporting.

  1. Business Valuation

    The process of determining the economic value of a business or ...
  2. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  3. Asset

    1. A resource with economic value that an individual, corporation ...
  4. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
  5. Liability

    A company's legal debts or obligations that arise during the ...
  6. Asset Valuation

    A method of assessing the worth of a company, real property, ...
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  1. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  2. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  3. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  4. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
  5. How can working capital affect a company's finances?

    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>
  6. What can working capital be used for?

    Working capital is used to cover all of a company's short-term expenses, including inventory, payments on short-term debt ... Read Full Answer >>

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