Asset based Valuation

Asset based Valuation

There are following types of Assets based Valuation

1. Net Book Value Method
2. Net Realizable Value Method
3. Replacement Cost Method

1.Net Book Value Method

In this method the value is calculated by deducting the liabilities from the assets and the residual amount is the value business. The amount is calculated on the book value of the assets and liabilities.

2.Net Realizable Value Method

This method is extension of net book value method with inclusion of net realizable value instead of book value. This method is used to calculate the minimum acceptable price.

3.Replacement cost Method.

This method explains that how much it will cost to build a new business from this stage. This method is used to calculate the maximum acceptable to the owner.