NAV Versus DCF For Shipping

This question tests whether you understand how to choose a valuation method based on a company’s asset base and the quality of available market data. In shipping, the value of the fleet and other tangible assets can often be estimated from observable market prices, which makes an asset based approach more practical than relying only on projected cash flows. Interviewers ask this because they want to see that you can think about when a balance sheet driven valuation is more appropriate than a DCF, and how industry characteristics affect the right valuation framework.