In our previous units, we covered why businesses are valued and how to calculate value based on their assets. Now, let's put those concepts into practice to solidify your understanding.
Engagement Message
Ready to test your skills?
Type
Multiple Choice
Practice Question
A valuation for a major acquisition deal needs to be highly defensible and detailed. This is an example of a:
A. Informal Estimate B. Formal Valuation C. Market Guess D. Internal Review
Suggested Answers
- A
- B - Correct
- C
- D
Type
Fill In The Blanks
Markdown With Blanks
Let's practice calculating book value again. A company has $1.2M in assets and $700k in liabilities. Its book value is [[blank:$500,000]].
If its real estate is re-appraised to be worth $100k less than its book value, the adjusted book value is [[blank:$400,000]].
Suggested Answers
- $500,000
- $400,000
- $600,000
- $1,900,000
Type
Swipe Left or Right
Practice Question
Which businesses are a good fit for asset-based valuation? Swipe left for 'Good Fit' and right for 'Poor Fit'.
Labels
- Left Label: Good Fit
- Right Label: Poor Fit
Left Label Items
- A real estate holding company
- A heavy manufacturing plant
- A large retail chain with lots of inventory
- A capital-intensive shipping company
Right Label Items
- A brand consulting agency
- A software development firm
- A popular YouTube channel
- A law firm with a strong reputation
Type
Sort Into Boxes
Practice Question
Sort these items based on where you would find them on a balance sheet.
Labels
- First Box Label: Assets
- Second Box Label: Liabilities
First Box Items
- Cash
- Buildings
- Inventory
- Equipment
Second Box Items
- Bank Loans
- Accounts Payable
- Bonds Issued
- Deferred Revenue
