Company value valuations | Business & Finance homework help
Intrinsic value takes into consideration many factors that may not be reflected in current stock prices and thus may be higher or lower than its actual market cap—it could even be negative if liabilities exceed assets. Additionally, there may also be discrepancies between intrinsic values determined by different analysts due to differences in assumptions used when calculating them. Therefore, while both metrics provide insight into companies’ overall financial health they should not necessarily be seen as interchangeable when making investment decisions.