Book Valuation Call

Asset-Based valuation

Asset-based valuation calculates the net value of a business by subtracting liabilities from the current market value of its assets. It is most relevant for capital-intensive businesses, holding companies, or distressed situations.

Other sectors

  • — Best for
Property businesses, manufacturers with significant plant, asset-rich holding companies, and businesses being valued for liquidation or restructuring.
  • — How it works

Step by step

01

Revalue tangible assets

Adjust property, plant, and equipment from book value to current market value.

02

Assess intangibles

Consider goodwill, IP, contracts, and customer lists — though these often sit better in income-based methods.

03

Deduct all liabilities

Including off-balance-sheet items such as lease commitments and deferred tax.

04

Apply realisation discounts

If valuing for distressed sale, apply discounts to reflect forced-sale conditions.
  • — Strengths
  • Strong floor value for asset-rich businesses
  • Useful in distressed or liquidation scenarios
  • Anchored in tangible, verifiable values
  • Easy to defend in negotiation
  • — Limitations
  • Materially understates profitable trading businesses
  • Doesn't capture brand or earnings power
  • Property revaluation can be subjective
  • Less relevant for service businesses
  • — Our insight

"Asset-based valuations are best used as a floor — combined with income-based methods to ensure a profitable business isn't undervalued"

Two men discussing business strategies over a laptop, with documents and a salad on the table, in a modern office setting, reflecting collaboration and planning for business valuation and exit strategies.
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Find out what your business could be worth before buyers do

If you are considering a sale now or in the next few years, a confidential valuation call can help you understand where you stand, what buyers may look for, and what could improve your outcome.

Book a Confidential Valuation Call

Private, no-obligation discussion for business owners.