It is used for real estate and holding companies and for businesses whose operations are winding down. Because it does not capture goodwill from operations, it is not sufficient on its own for profitable, growing companies.
Source: Uluslararası Değerleme Standartları (UDS)
Related terms
ValuationEstimating the monetary value of a company, share, asset or liability at a specific date and for a specific purpose.Fair valueThe price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.Discounted cash flow (DCF)A valuation method based on discounting the free cash flows an asset or company will generate in the future to the present using an appropriate discount rate.BetaA coefficient measuring the sensitivity of a share's return to changes in the market return, that is, its systematic risk.Break-even pointThe sales volume or amount at which total revenue equals total cost and the business makes neither profit nor loss.Capital asset pricing model (CAPM)A model that calculates the cost of equity from the risk-free rate, beta and the market risk premium.
Last updated: October 31, 2026 · This definition is for general information only.