Why Adjusted Book Value Matters in Valuation

Adjusted Book Value (ABV) isn’t the most popular method—but that doesn’t mean it’s not important.

In some cases, when valuing a business, it’s the method selected as the most suitable one.

Why?

Because sometimes, the real value lies in the assets, not the operations.
Especially in businesses that:

  • Own land in prime locations
  • Hold assets that appreciate over time (not depreciate)

In some cases, the land alone could be worth more than the business itself—higher than what a DCF valuation might suggest.

So eventhough using DCF or market multiples are more frequently used, the adjusted book value helps paint the full picture.
And sometimes, that picture is worth a lot more than expected.

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