What is Orderly Liquidation Value?

Do you know what a liquidation value is? It’s the estimated amount of money a company’s assets could quickly be sold for if the company went out of business. In a normal, growing industry that shows profit, a company’s liquidation value would be much less than the company’s share price. In an unprofitable or shrinking industry, the liquidation value would likely exceed the share price. Though not always the case, if the liquidation value exceeds the share price, the company will go out of business.

An orderly liquidation value is based on the idea that a company can afford to sell off its assets to the highest bidder. It assumes an orderly sale process in which the seller can take a reasonable amount of time to sell each asset in its appropriate season, and through channels of sale and distribution that fetch the highest reasonable price.

A Certified Machinery & Equipment Appraiser (CMEA) can determine a company’s orderly liquidation value and prepare a credible Certified Equipment Appraisal Report that will hold up under multiple layers of scrutiny.

Curious about your company’s orderly liquidation value? Find a CMEA today!

By: NEBB Institute