Intrinsic Business Value Definition
The measure of business value that reflects an investor’s in-depth understanding of the company’s true economic potential.
What It Means
You would choose the intrinsic business value standard if you seek to determine the business worth based on your solid understanding of the business fundamental attributes. This knowledge allows you to develop a comprehensive estimate of business value based on what business ownership benefits can be achieved. These benefits are tied to a number of key factors such as:
- Business earnings potential.
- Likely business growth.
- Company’s financial and operational strength.