Distinction between Valuation concepts
The term value holds different meanings to different people. The underlying explanations also differ with the change in context and time.
Liquidation value vs Going concern value
Liquidation value is the amount of fund that can be generated if the asset(s) is sold separately from its operating organization. Whereas the going concern value is he amount of fund that can be generated by selling the firm as an on going business concern (the future cash flows come into the picture).
Book value vs Market value
The book value of an asset is the accounting value of the asset (cost-depreciation). The book value of a firm is the net of total assets (-) total liabilities and preferred stock. Since the book value is a representative of the historical value, its effect on the market value is minimal.
Market value is the value at which the asset or the firm trades in the open market.
Market value vs Intrinsic value
Market value, hence, is the market price of its stock (if listed in the secondary markets).
The intrinsic value is the market valuations of the asset or the firm based on hard facts (the ideal value based on all information about present and future cash flows).
In an efficient market the market value will hover around the intrinsic value.
