Book Value Of Equity Financial Statement

Book value of equity also known as shareholder s equity is a firm s common equity that represents the amount available for distribution to shareholders.

Book value of equity financial statement. From the perspective of an analyst or investor it is all the better if the balance sheet of the company is marked to market i e it captures the most current market value of the assets and the liabilities. Book value is the company s total assets minus its liabilities and intangible assets. Book value of debt is accounted for in the financial statements based on the amortization schedule of the debt or historical cost.

Book value of equity is an estimate of the minimum shareholders equity of a company. If we apply it to the formula book value of equity total assets total liabilities. While book value is the same as shareholders equity on a balance sheet it is not the same as equity.

These three core statements are intricately. In other words the ratio is used to compare a business s net assets that are available in relation to the sales price of its stock. Book value us 375 32 billion us 241 27 billion us 134 05 billion.

This article has been a guide to what is book. This amount includes common stock retained earnings and other equity. Book value may also be.

Book value is a company s equity value as reported in its financial statements. Put another way if a company were to close its doors sell its assets and pay off its debts the book value of equity is theoretically the amount that would remain to be divided up among the shareholders. It is the sum of the total debt recorded in its balance sheet and is useful in calculating of liquidity ratios of the firm.

The book value of equity is equal to total assetsminus total liabilities preferred stocks and intangible assets. Book value of equity is an important concept because it helps in the interpretation of the financial health of a company or firm as it is the fair value of the residual assets after all the liabilities are paid off. The book value equals the net assets of the company and comes from the balance sheet balance sheet the balance sheet is one of the three fundamental financial statements.