Explore commonly used personal finance terms.
Absolute value is the standalone worth of an asset, without considering other factors like liabilities, market conditions, or relative comparisons. In finance, absolute value can be applied to analyze cash flows, evaluate intrinsic value, or assess investment opportunities. Absolute valuation techniques, such as Discounted Cash Flow (DCF), estimate an asset’s value based solely on projected future cash flows. This method contrasts with relative valuation, which assesses value compared to other similar assets.
