Business Valuations: Going-Concern, Liquidation, and Orderly Disposition

There are three primary bases for valuing a company: Going-Concern, Liquidation, and Orderly Disposition. A Going-Concern valuation refers to a company that has the resources to continue operations indefinitely; a Liquidation valuation refers to the value of a company if operations are ceased and the assets are sold off separately and an Orderly Disposition valuation assesses the value at which the asset or assets are sold over a reasonable period of time to maximize the proceeds received. The basis for conducting the valuation will impact the weighting of the three approaches.

The three approaches that must be considered by a valuation analyst when valuing a Going-Concern include: