Where does a company’s wealth go if they go bankrupt?
In: 7
There is nothing that says wealth needs to be preserved. If you buy a house and then burn it down you won’t be able to sell it for as much as you paid for it. The land would be worth something and there may be other things that are salvageable but wealth has been lost.
That’s extreme, but things can depreciate if maintenance is ignored or if the neighborhood gets bad.
The same thing can happen with companies. Maybe they lose an account. Maybe a breakthrough at another company makes it hard for them to compete with them. Wealth can simply be lost.
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