book value

Fin
value of a company’s stock according to the company itself, which may differ considerably from the market value.
EXAMPLE
It is calculated by subtracting a company’s liabilities and the value of its debt and preferred stock from its total assets. All of these figures appear on a company’s balance sheet. For example:
Book value per share is calculated by dividing the book value by the number of shares in issue. If our example is expressed in millions of dollars and the company has 35 million shares outstanding, book value per share would be $650 million divided by 35 million:
650/35 = $18.57 book value per share
Book value represents a company’s net worth to its shareholders. When compared with its market value, book value helps reveal how a company is regarded by the investment community. A market value that is notably higher than book value indicates that investors have a high regard for the company. A market value that is, for example, a multiple of book value suggests that investors’ regard may be unreasonably high.
Also known as carrying amount, carrying value

The ultimate business dictionary. 2015.

Look at other dictionaries:

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