Book Value Vs Face Value

An overview of face value market value book value.

Book value vs face value. Book value share total assets total debt no. Recently when i was navigating my quora profile i got an answer request for the question what is the difference between face value and market value of a company although both these are elementary terms related to stocks however they may be a little confusing for the beginners. Cipla s face value share rs 2 0 won t change unless the company splits the stock to halve the stock price by doubling the number of shares book value is value of the company s assets if it were to be liquidated on a day less all debt holder claims.

Face value is the value of a company which is listed in its books and share certificate. It is a measure of the amount per share that a shareholder will get if the company is liquidated today. In this article we will discuss book value vs fair value in detail and indicate their key distinctions.

Apart from the face value you need to concentrate on the market value and the book value of the stock. Book value indicates an asset s value that is recognized on the balance sheet. There are rules based on which these value shall be recorded in the companies book of accounts.

Book value is also known as net asset value. The carrying value or book value is an asset value based on the company s balance sheet which takes the cost of the asset and subtracts its depreciation over time the fair value of an asset is. Whereas intrinsic value and market value are more liquid and real numbers.

Face value and book values are more of a static theoretical numbers. Book value is an important measure for safety of investment while investing in a stock. Face value and book value are entries made in companies balance sheet for the sake of bookkeeping only.

If the market value is greater than the book value. In the example here with cipla. It is calculated as.