Let’s talk about the definition of value

I think it only would make sense to define the term value especially in relation to business valuation.

Fair Market Value – It probably almost universally accepted as the cash price for which a business would change hands between a willing buyer and a willing seller.  Of course neither is either compelled to transact and both parties are aware of all the facts.

Going-concern Value – It is used to mean the total value of a business as a going concern.

Liquidation Value – This is the net amount that can be realised if the business is terminated and the assets are sold off.

Book Value – This is a bit of a contradiction because it does not represent any standard of value.  It is an accounting term and not an appraisal term.  Book Value is the sum of all the assets less depreciation and amortisation as shown on the balance sheet.