Intrinsic value forces us to think about what a business is actually worth based on its cash earnings over time.  Many investors fail to ground their decision making in intrinsic value and instead attempt to anticipate future moves in market price.  But businesses have an intrinsic worth separate from what the market price may say at any point in time.  By focusing on valuation instead of market price, investors can determine whether an investment is likely to be over-valued, fairly valued, or undervalued by the market.  In this paper investors will gain a firm conceptual understanding of intrinsic value, and learn three basic approaches for assessing the value of a business.

Intrinsic Value – Basics of Valuation