Talk:Liquidation value

What is the difference between liquidation value and terminal value?

What is the difference between liquidation value and terminal value?

Liquidation value is, as described, sale of a business or asset within a short time frame leading to a lower price than might be achieved under different circumstances.

Terminal value is a term of art used in the discounted cash flow financial modeling of company values that represents the estimated value of a company at the end of the defined forecast period. For example, if a five-year forecast is used, the terminal value would be an estimate of the value of the company at the end of five years. This value would be discounted to the present to be made a component of the overall value of the firm.