Difference Between Book Value And Market Value

Book value is equal to the value of the firm s equity while market value indicates the current market value of any firm or any asset.

Difference between book value and market value. This is the price at which market values the stock. Is being bought and sold for on the market at a given time. Market value is that current value of the firm or any asset in the market on which it can be sold.

Whereas market value is the price lower or higher than the book value which can be obtained in case of selling of that assets class or it is the price which is offered by a customer during the sale of the assets. In those cases the market sees no reason to value a company differently from its assets. The market value is simply the price that the stock company etc.

The other one is based on the company s superficial value and this always varies. For example one of the key applications of the difference between an asset s book and market values is the company s valuation. Book value is the recorded price of an asset which is shown in the balance sheet excluding depreciation.

The difference between book value and market value. When the market value is less than book value the market doesn t believe the company is worth the value on its books. Book value gives us the actual worth of the assets owned by the company whereas market value is the projected value of the firms or the assets worth in the market.

In addition book value is frequently used to determine whether an asset is under or overpriced. Oftentimes there are vast differences between the market value and book value mainly because the latter is based on the asset s historical cost. It can be determined by finding the difference between the asset s book and market values.

Conversely market value shows the current market value of the firm or any asset. Market value per share is the current value of the stock. Book value equals market value.