Going concern value

Going concern value is what a business is worth assuming it keeps operating indefinitely, rather than being shut down and sold off piece by piece. Nearly every earnings based or cash flow based valuation method, from a discounted cash flow model to a simple price to earnings ratio, implicitly assumes going concern value, since all of them price a business on what it can keep producing rather than what it could be broken up and sold for.

Going concern value is typically the highest of the common ways to estimate what a business is worth, since a working, profitable business earns more together than its assets alone could bring in a sale. The difference only narrows or disappears when a business is struggling badly enough that continuing to operate it is worth less than shutting it down would raise, the situation liquidation value estimates are built for.