Liquidation value

Water Cooler Investing
#1

Hello guys,

I am new in the investing area and I want to understand how could I estimate the liquidation value of some company. If I buy a company and it bankrupt how much will I receive?

I pretty sure that there are not so many companies where you can buy below the liquidation value, but I will appreciate if you share knowledge and experience.

Thanks!

#2

Search for “Graham net net” which while provide a good summary. A starting point is to take total current assets less all liabilities. If you want a more detailed analysis you can discount certain current assets such as receivables and inventories to reflect the true liquidation value.