What is the meaning of liquidation value? Explain the process of computation of liquidation value of an enterprise.

Liquidation value is the total worth of a company's physical assets when it goes out of business or if it were to go out of business. Liquidation value is determined by assets such as real estate, fixtures, equipment and inventory. Intangible assets are not included in a company's liquidation value. Liquidation value is usually lower than book value but greater than salvage value. The assets continue to have value but, due to a limited time frame, must be sold at a loss to book value. Liquidation value does not include intangible assets. Intangible assets include a business's intellectual property, goodwill, and brand recognition. Value investors look at the difference between a company's market capitalization and its going concern value to determine whether the company's stock is currently a good buy. The liquidation value is calculated as follows: Net Realisable valuation method is generally used in case of liquidation. From the balance sheet of the company calculate the assets and liabilities of the company. The assets have to be valued as if they are individually sold and not as a going concern value. The intangible assets are not considered for liquidation value Total Assets minus total liabilities constitute the liquidation. Some liabilities which arise on closure should also be considered like retrenchment compensation. Tax consequences have also to be taken into consideration. Any distribution to the shareholders of the company on its liquidation, to the extent of accumulated profits of the company is regarded as deemed dividend. Dividend Distribution tax will have to be captured for such valuation.