Dear 007 (If I may call you that),
The three components you mentioned - that is : short-term marketable
securities, inventories, and accounts receivable - consist of the
current assets a business may have.
A valuation of the current assets has a vital role in the fate of a
business enterprise. First, they set, at least partially, the net book
value. Net book value, is the difference between the total assets
(current included) and total liabilities. Specifically, the working
captal (which is only the different between the current assets and the
liabilities) is important for a business enterprise.
Thus, as a second reason, valuation approach matters. An approach that
valuates first and foremost assets (based on the value of the Adjusted
Book Value of a company) would centralise on such an aspect. However,
also approaches that are income based or market based cannot ignore
the current assests completely, as these are part of setting
predictions on prospective income or market share.
Read More
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Glossary of Financial Terms <http://fcib.crmz.com/Help/Glossary.asp>.
Robert F. Reilly, "Valuing Intangible Assets: A Case Study" ,
<https://www.cpa2biz.com/ResourceCenters/Business+Valuation/Mergers+and+Acquisitions/Valuing+Intangible+Assets:+A+Case+Study.htm>:
a specific case that examines asset-based approach valuation in cases
of discrete intangible assets and refers also to the importance of
valuating current assets.
I hope this answered your question. I used the following terms to
search the web: valuation "Current Assets" "business enterprise"
short-term marketable
securities, inventories, and accounts receivable.
Please contact me if you need any further clarification on this answer
before you rate it. |
