About Lesson
a. The asset-based valuation model uses the market value of the company’s assets and liabilities to determine the value of the company as a whole.
b. The assets-based valuation models are more frequently used with:
i. the private companies,
ii. the companies with a fewer number of intangibles, or off-the-book assets,
iii. the companies with a higher proportion of current assets and current liabilities,
iv. the companies that are being liquidated,
v. the financial companies, etc.
c. These models are usually not suitable for the companies whose market values of the assets and the liabilities are difficult to determine or have a significant amount of intangible assets.