Net asset value as a business valuation technique : an assessment

Abstract

This dissertation starts off by identifying and explaining the need for business valuations. It continues by giving a brief explanation of the commonly used methods ? emphasizing on the Net Asset Value (NAV) methodology. This enables the reader to understand common concepts and consequently be able to compare one method with another. At this stage, much of the information deals with the theoretical aspects of these methodologies. The findings revolve around today?s appraisers? attitudes towards these techniques ? focussing mainly on the NAV methodology. The information gathered was enough to establish the use, relevance and significance of this asset based technique. At a theoretical level this methodology seems to be very simple and straightforward, but the results show that there are several issues that must be addressed when making use of this method. Furthermore, although the NAV methodology may seem naïve, it is still considered vital during a business valuation process.