Going-Concern Value

Going-concern value is the estimated value of a company if it continues to operate as a going concern. It is calculated by taking the present value of the company's future cash flows. The going-concern value is used to determine the fair value of a company's assets, and it is also used in bankruptcy proceedings.

There are a few different methods that can be used to calculate the going-concern value of a company. One common method is the discounted cash flow (DCF) method. The DCF method involves estimating the company's future cash flows and then discounting them back to the present value using an appropriate discount rate. The discount rate is a rate of return that reflects the risk of the investment.

Another method that can be used to calculate the going-concern value of a company is the asset-based approach. The asset-based approach involves estimating the value of the company's assets and then subtracting the value of the company's liabilities. The resulting figure is the company's net asset value.

The going-concern value of a company is an important factor to consider when making investment decisions. The going-concern value is a measure of the company's ability to generate cash flows in the future. A company with a high going-concern value is more likely to be able to generate cash flows in the future, and therefore, it is more likely to be a good investment.

The going-concern value of a company can also be used to determine the fair value of the company's assets. The fair value of an asset is the price that would be received for the asset in an arm's-length transaction. The going-concern value of a company is used to determine the fair value of the company's assets because it reflects the company's ability to generate cash flows in the future.

The going-concern value of a company is also used in bankruptcy proceedings. In bankruptcy proceedings, the going-concern value of a company is used to determine the amount of money that the company's creditors will receive. The going-concern value is used to determine the amount of money that the company's creditors will receive because it reflects the company's ability to generate cash flows in the future.