Asset based models
You'll learn how to value a business using asset-based models, a method that calculates company value as assets minus liabilities.
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In this lesson
- 0:00 Asset-based business valuation overview
- 0:26 Book value versus realisable value methods
- 0:45 When to use asset-based valuation
- 1:22 Intangible assets and goodwill limitations
- 2:13 Calculated intangible value method explained
- 3:37 Totem Limited worked example
About this lesson
This video covers the net asset value approach, its limitations when dealing with intangible assets like patents and goodwill, and introduces the calculated intangible value method—a more sophisticated technique that captures hidden value beyond the statement of financial position. You'll work through a practical example to see how to isolate profit from intangibles, apply tax adjustments, and discount future earnings to arrive at a complete company valuation. This is essential for valuation questions in FM, AFM, and SBL papers where you need to justify why traditional asset-based methods alone often undervalue a business.
Duration: 5m
Transcript
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