Book Value What Is

The book value of a company is the total value of the company s assets minus the company s outstanding liabilities.

Book value what is. It s also known as the net book value. It s wise for investors and traders to pay close attention however to the nature of the company and other assets that may not be well represented in the book value. The company s balance sheet is where you ll find total asset value and for.

Book value or carrying value is the net worth of an asset that is recorded on the balance sheet. Book value is an asset s original cost less any accumulated depreciation and impairment charges that have been subsequently incurred. The total amount of stockholders equity appearing on a corporation s balance sheet.

In accounting book value is the value of an asset according to its balance sheet account balance. As a result book value can also be. However in practice depending on the source of the calculation book value may variably include goodwill intangible assets or both.

For assets the value is based on the original cost of the asset less any depreciation amortization or impairment costs made against the asset. Book value is the net asset value nav of a company s stocks and bonds. What does book value mean.

Book value is equal to the cost of carrying an asset on a company s balance sheet and firms calculate it netting the asset against its accumulated depreciation. Examples of book value calculations. Then you d divide the net assets by the number of shares of common stock preferred stock or bonds to get the nav per share or per bond.

Traditionally a company s book value is its total assets minus intangible assets and liabilities. If a company s computer system had a cost of 300 000 and it has accumulated depreciation of 80 000. Book value is a widely used financial metric to determine a company s value and to ascertain whether its stock price is over or under appreciated.