Howdy shanley35!
First, keep in mind the "Important Disclaimer: Answers and
comments provided on Google Answers are general information,
and are not intended to substitute for informed professional
medical, psychiatric, psychological, tax, legal, investment,
accounting, or other professional advice.
It is appropriate to use book value to estimate the terminal
value of a company when the firm is going to be liquidated,
as the QuickMBA web site infers:
http://www.quickmba.com/finance/terminal-value/
"If the firm is to be liquidated, the liquidation value can
be based on book value, salvage value, or break-up value,
but liquidation value usually understates the terminal value
of a healthy business."
It would also be appropriate if one is either doing an
estimated valuation, or in the event the firm does not have
any real assets, inventory or accounts receivables to be
accounted, as per Allison Appraisals.
http://www.aappraisals.com/glossary.htm
"Some CPA’s use book value as a quick and dirty approach
when valuing a business. When assets include real estate
and a lot of equipment, the result may be considerably
skewed from Fair Market Value. Adjustments for accounts
receivable and inventory may be warranted, too. Doing
this creates adjusted book value which is a more accurate
reflection of a going concern."
"terminal value" "book value"
://www.google.com/search?q=%22terminal+value%22+%22book+value%22
If you need any clarification, feel free to ask.
Looking Forward, denco-ga |
