Enter the auction price ($) and the liabilities ($) into the Liquidation Price Calculator. The calculator will evaluate and display the Liquidation Price.
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Liquidation Price Formula
The following formula is used to calculate the Liquidation Price.
LP = AP - L
- Where LP is the Liquidation Price ($)
- AP is the auction price ($)
- L is the liabilities ($)
To calculate a liquidation price, subtract the liabilities from the auction price.
How to Calculate Liquidation Price?
The following example problems outline how to calculate Liquidation Price.
Example Problem #1:
- First, determine the auction price ($).
- The auction price ($) is given as: 400,000.
- Next, determine the liabilities ($).
- The liabilities ($) is provided as: 80,000.
- Finally, calculate the Liquidation Price using the equation above:
LP = AP – L
The values given above are inserted into the equation below:
LP = 400,000 – 80,000 = 320,000.00 ($)
Example Problem #2:
For this problem, the variables needed are provided below:
auction price ($) = 30,000
liabilities ($) = 10,000
This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.
LP = AP – L = ?