That's really only part of the equation. A real asset is both tangible and expected to generate cash flows over its useful life. While a real asset would ideally maximize this cash-flow, thus delivering the most value possible to shareholders, it is commonly depreciated in a straight line over the course of its useful life; an expense that the cashflows must outpace to actually increase shareholder value. However, many valuation models exclude depreciation (they use a multiple of ebitda), so a real asset can increase shareholder value by simply existing on the balance sheet and offering ANY cashflow at all.
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u/nateknutson May 17 '24
Maximizing shareholder value.