9 Principles Of Corporate Finance You Need To Know

In order for the company to perform efficiently, it needs access to these resources. The company will have different types of assets; some are more liquid than others. Liquid assets like cash can easily be converted into other forms of capital like stocks or bonds while other assets may not be as liquid as they could use more time and effort to sell them off without significantly damaging their value. You can only compare an asset's market price with its book value; this is what theasset's intrinsic value is. This intrinsic value is calculated by taking all of the asset's liabilities and subtracting their book values from their market prices. What remains is what an asset is worth in free and fair market conditions – this is called fair market value (FMV).

Leave a Reply