Liquidation value of a business is its value at a time when creditors surrender it in order to reclaim their loans to the business. This will involve evaluating, in cash terms, anything that is worth selling to make that loan repayment in full. Generally tangible assets are first on the list, followed by intangibles such as patents or other intellectual properties, brands, etc.
The reason why liquidation value is not relevant to estimating intrinsic value of a business is that, apart from taking all the “cashable” assets into account, it is not concerned with added value of employees who are invaluable on a going-concern basis. A going-concern assumption adds employee skill-set in valuing process making it more expensive, quite rightly when the skill-set is of an outstanding quality.
When business is liquidated, workforce is generally viewed as an expense, whereas when business is fully functioning and expanding, a going-concern value is being boosted by assigning a monetary value to the workforce.