Book value

Why book value can be misleading

– By Rupert Hargreaves Book value is a fundamental part of value investing. The metric is important because it gives a fundamental value of a company. In theory, if a company declared bankruptcy, that’s how much the assets would fetch at auction. Of course, in the real world, book value is relatively unreliable. Some assets […]

Book value

Modified book value

What is Modified Book Value? Modified book value is a valuation measure to determine the value of a business based on the current market value of its assets and liabilities. In other words, modified book value adjusts the value of a company’s assets and liabilities to reflect fair market value. Since assets are carried at […]

Book value

Book Value vs. Salvage Value: What’s the Difference?

Book Value vs Salvage Value: An Overview Book value and salvage value are two different measures of value with significant differences. Book value attempts to approximate the fair market value of a business, while salvage value is an accounting tool used to estimate depreciation amounts for tangible assets and to arrive at deductions for tax […]

Book value

Definition of book value per share (BVPS)

What is book value per share (BVPS)? Book value per share (BVPS) is the ratio of equity available to common stockholders divided by the number of shares outstanding. This figure represents the minimum equity value of a company and measures the book value of a company on a per share basis. Key points to remember […]

Book value

Definition of book value: formula and calculation

What is book value? Book value is equal to the cost of maintaining an asset on a company’s balance sheet, and companies calculate it by deducting the asset from its accumulated depreciation. Therefore, book value can also be thought of as the net asset value (NAV) of a company, calculated as its total assets minus […]

Book value

Definition of Adjusted Book Value

What is Adjusted Book Value? Adjusted book value is the measure of a company’s valuation after liabilities – including off-balance sheet liabilities – and assets adjusted to reflect true fair market value. The potential downside of using adjusted book value is that a business could be worth more than its stated assets and liabilities because […]

Book value

Definition of book value reduction

What is book value reduction? A reduction in book value decreases the value at which an asset is recorded on the books. This reduction occurs because changes in the asset or market conditions have reduced its current market value. Key points to remember A reduction in book value is the result of a decrease in […]

Book value

Definition of price to tangible book value (PTBV)

What is Price vs. Tangible Book Value (PTBV)? Price to tangible book value (PTBV) is a valuation ratio expressing the price of a security relative to the book value of its tangible or tangible assets, as shown on the company’s balance sheet. The number of tangible book values ​​is equal to the total book value […]

Book value

How are book value and intrinsic value different?

Book value and intrinsic value are two ways to measure the value of a business. There are a number of differences between them, but book value is basically a measure of the present, while intrinsic value takes into account estimates in the future. What is book value? Book value is based on the value of […]

Book value

What book value means for investors

Profits, debt and assets are the building blocks of any public company’s financial statements. For disclosure purposes, the companies break these three elements down into more precise numbers that investors can review. Investors can calculate valuation ratios from these to help compare companies. Of these, book value and price-to-book ratio (P/B ratio) are must-haves for […]