ASSET VALUATION Definition

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ASSET VALUATION is the process of determining the current worth of a portfolio, company, investment, or balance sheet item. The term is often used to describe the worth of an asset which may be incorporated into company accounts, where the ownership of the asset is not necessarily to be transferred but the valuation is required for the balance sheet, company takeovers, share flotation or mortgages.

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NET RECEIVABLES are a companys accounts receivable (money owed to the company) minus any provisions for bad debts. A firm with a sustainable competitive advantage shows a lower percentage net receivables to gross sales than their competitors, i.e. a firm with a sustainable competitive advantage need not be generous with credit.

PRE-TAX INCOME/PROFIT see PROFIT BEFORE TAXES.

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