Realisation of Assets: Maximising Value in Liquidation

Even in a busy and lucrative market, a lot of businesses simply do not seem to be able to find their feet and end up closing down as a result. When this happens, owners need to enter into the liquidation process and doing this can be incredibly difficult. Financial experts can help owners make informed decisions about the best way that they and their business can move forward. On top of that, they will be able to assist when it comes to valuing a business throughout the liquidation process, as this is very important when it comes to paying back creditors as fully as possible and getting as much for your business as you can. 

One of the most important questions that will be asked throughout the liquidation process is: How much is this company worth? The answer to that question will determine the way forward massively and as such, it is one of the first things that administrators and liquidation experts such as Simple Liquidation will consider. The majority of business valuation experts will calculate a company’s value as a going concern; however, certain financial trends will also play a part. The likes of a recurring net loss, declining sales and severely reduced liquidity will suggest that a business and its assets will likely be more valuable if liquidation takes place sooner rather than later. The liquidation value is mostly relevant when the history of the company and its current income doesn’t contribute towards its net tangible asset value.

Hard assets, which include the likes of machinery, land, buildings and equipment tend to be very valuable items and as such are important for the liquidation process. They can generate large sums of money if they are owned by the company and as such, the valuation which is applied to them must be realistic.

There are different types of assets which apply to different businesses though, so it’s not always straightforward when it comes to selling certain types of assets. For instance, thanks to the introduction of remote working and with our general increased reliance on technology, there are a lot of businesses out there that don’t have any physical assets at all. As such, valuing intellectual property might be the only option, which can be a complex process. The likes of stock and work in progress can be valued as viable company assets that could be relied upon when determining the overall worth of a company that finds itself in trouble.

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