Book Value
Golfnut, you are correct. Companies do not use “fire sale” valuations in computing book value. In fact, the majority of companies book value is understated, because of the requirement to carry assets (such as property) at historical cost, not current market value. However, investors DO use book value as a way of arriving at a “worst case” valuation, especially with companies showing drastically declining revenue (like SEVU).
Bill Branum
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