Book Value


Book Value equals a company's total assets minus its liabilities.

Book Value (alternately "Net Asset Value" or "Total Equity") is an accounting term generally referring to the the sum of all of a company's assets minus its liabilities. It is found on (or derived from) the balance sheet usually under the synonyms Shareholders' or Stockholders' Equity.

Book Value per Share is a recalculation of the book value, wherein the total book value is divided by the number of shares outstanding. This number is particularly useful in quickly calculating the price to book ratio.

Book Value vs. Tangible Book Value

A company's book value may be significantly affected by intangible assets and/or goodwill. As the values of these assets are significantly more subjective than "hard" assets (such as cash or property, plant and equipment), including them in the calculation of book value may misrepresent the underlying worth of the company. To rectify this, many sources will include a Tangible Book Value, which is the book value minus intangible assets and goodwill (or total assets minus liabilities, intangible assets, and goodwill).


  • On its balance sheet, company ABC has assets of $500 million and total liabilities of $300 million. Therefore, its book value is $200 million (500 – 300).
  • On its balance sheet, company XYZ lists assets of $450 million, of which $125 million is attributed to intangible assets and $25 million to goodwill. XYZ also lists total liabilities of $200 million. The book value, therefore, is $250 million (450 – 200) while the tangible book value is $100 million (450 – 125 – 25 – 200).
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki