An asset-based business valuation focuses on the "book value" of a business. With this approach, business assets are valued and totaled, and any corresponding liabilities are deducted. It is often used in conjunction with other methods of valuation and may be required as part of the due diligence process for some companies.

Struggling or closing businesses with little to no profit may often sell at this value in an asset sale. If the business in question doesn't have the net income to warrant a market-based valuation, then on paper, it's only worth the value of its assets. These assets include furniture, fixtures and equipment (ffe), intellectual property, real estate, production equipment, and inventory.