Asset-Based Valuation

Asset-Based Valuation is a method used to determine a company's worth by calculating the total value of its tangible assets, such as property, equipment, inventory, and cash, minus its liabilities like debts and obligations. It essentially assesses what the company owns and subtracts what it owes to find its net asset value. This approach is often used for companies with significant physical assets or when financial performance is unstable. It provides a snapshot of the company's underlying worth based solely on its assets, rather than future earnings or market trends.