👉 Asset math, also known as asset-based valuation or balance sheet valuation, is a method used to estimate the value of a company by analyzing its assets rather than relying solely on income or earnings metrics. This approach involves assessing the net asset value, which is calculated by subtracting total liabilities from total assets. Key components include current assets (like cash, inventory, and accounts receivable), non-current assets (such as property, plant, and equipment), and intangible assets (like patents and trademarks). By comparing these asset values to the company's equity, analysts can derive an estimate of the company's worth. This method is particularly useful for companies with significant tangible assets, providing a more concrete measure of value independent of future earnings potential.
