Book Value And Market Value Will Always Be The Same Dollar Amount

Book value is equal to the value of the firm s equity.

Book value and market value will always be the same dollar amount. It is a dollar amount computed based on. Book value is based solely upon the company s reported financial condition while market value is primarily based upon the company s cash flow and the public s confidence in how the company will do. Market value is equal to market capitalization.

Book value and market value are key. Book value is the actual worth of an asset of the company whereas market value is just a projected value of the firm s or asset s worth in the market. A company buys a machine for 100 000 and subsequently records depreciation of 20 000 for that machine resulting in a net book value of 80 000.

Book value per share and market value per share are usually the same dollar amount. The number of shares outstanding almost always remains the same. Example of the difference between book value and market value.

Book value per share is of greater concern to the financial manager than market value per share. Book value is equal to market value sometimes an asset s book value is equal to its market value. Let s say an asset has a book value of 2 000.