Company Valuation in Liquidation

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Date10/31/2020 6:18:26 AM
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A liquidation valuation report is where the data for a company’s entire intrinsic value is calculated for the purpose of dissolving the business and redistributing the assets and properties accordingly where necessary and mandated.

The current market price i.e. the value of your business contents is the net liquidation value. Whatever is distributed to the shareholders of the company after the liabilities are paid off is liquidation value per share. This amount per share also depends upon the contribution or holding value of the shareholder of the company.

The liquidation value of a company is frequently lower than the market value of the company because often at the time of liquidation the company is under duress or severe compulsion to get it done thereby decreasing it’s chances to find the ultimate best buyer that would be most beneficial for the company. This is where the liquidation value vs market value debate starts because oftentimes people think your company is liquefied at its worth but that’s not the case, because it would rate higher if there were more time or chances to try it’s worth.

In liquidation, preferred stock is generally more complicated than common stock to calculate due to the fact that it includes both stocks and bonds. Whenever you’re confused about how to calculate liquidation value of preferred stock, you need to keep in mind the fact that they have a priority claim on the company's assets.


Quantum Auditing is one of the top accounting firms in UAE and Bahrain that deals with all services and advisory related to accounting, auditing and finance. They give professional and completely objective advice upon evaluation and analysis of a company’s respective components in the matter at hand. Apart from that they have some of the most highly experienced experts on board that assist you in whatever service you require regarding your business’s financial functions including auditing different departments.
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