The Relationship Between Fixed Asset Liquidation Value And Market Capitalization

Main Article Content

T. Maurice Lockridge
Gary Saunders
Uma Sridharan

Keywords

Book value, Firm book value, Firm liquidation value, Firm market capitalization, Firm market value, Fixed asset, Liquidation value, Market capitalization, Market value, Value-relevance

Abstract

This study examines the relationship between the liquidation values of a firm’s fixed assets and the firms’ market capitalization.  The significance of this relationship is demonstrated by comparing it with the relationship between the book value of a firm’s fixed assets and the firm’s market capitalization.  A stronger, or enhanced, relationship for liquidation values to market capitalization indicates it’s usefulness for decision making purposes.

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