Liquidation Value: All valuations consider present and future values. Value is generated over time. It begins in the present and extends into the future. This ongoing value is referred to as continuing value. Countries, corporations, households, and individuals set current values based on the belief that the present state will persist. What happens if it does not continue? It loses its future value. This state is known as the liquidation value. For example, this occurs if you quit your business. Almost all investments involve buying and selling assets based on their future worth. If you buy at a price lower than the liquidation value, you make a significant profit. If you buy at the liquidation value, you pay a fair price. If you pay more, you risk overpaying or buying a bubble. Value depends on time. Continuing a process is key to valuation. - Joseph’s “just my thoughts”
To realize added value , production activities must occur. In other words, added value arises from production activities. Production involves bringing into existence things that did not previously exist in the world. This can be accomplished by combining existing items to create new ones or by processing raw materials into new products . Production includes physical manufacturing , knowledge generation , and service creation . Wealth represents the accumulation of added value. Consequently, to become wealthy, one must be productive . However, value is determined through relative comparison. A product can only be exchanged if it can be priced, and added value can only be actualized by exchanging this product. This process is referred to as commerce . In other words, it is known as a transaction . Through trade , humanity distributes this added value. - Joseph’s “just my thoughts”