Business Valuation Glossary
Assets
Definition
Asset is an item generally appearing on the business Balance Sheet. It represents an economic value that can be used by the business to produce revenue and earn a profit.
What It Means
Business assets are valuable possessions that are used in business activities to produce revenues and profits. Typical assets appearing on the Balance Sheet are:
- Cash and short term investments
- Accounts receivable
- Inventory
- Equipment and machinery
- Business real estate
In addition, a number of important business assets may not appear on the company’s balance sheet:
- Intangible assets, such as internally developed intellectual property
- Business goodwill
Similar to the calculation of business value, there are three ways to determine the value of a business asset:
- Cost approach
- Market approach
- Income approach