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Successful Acquisitions by David Braun

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Method 2: Liquidation Value

The second method I recommend is liquidation value (see Figure 9-4). The question this approach answers is: What would the company be worth if it closed down today? Here you estimate the value of the assets the prospect holds, particularly if the company owns real estate or large pieces of capital equipment. Capital equipment may have depreciated but can still add value to the balance sheet. Precisely identifying the total assets of the prospect can be difficult in the early stages, but you can make educated guesses if you conduct thorough research and listen carefully to what the owner says.

What you are essentially trying to do with this approach is understand the difference between the current market value of the ...

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