Book Value Of Equity Wikipedia

Equity can apply to a single asset such as a car or house or to an entire business.

Book value of equity wikipedia. Equity is measured for accounting purposes by subtracting liabilities from the value of an asset. The term book value of equity refers to a firm s or company s common equity which is the amount available that can be distributed among the shareholders and it is equal to the amount of assets shareholders own outright after all the liabilities have been paid off. Equity value accounts for all the ownership interest in a firm including the value of unexercised stock.

Book value of equity is an estimate of the minimum shareholders equity of a company. Book value of equity is equal to the assets less liabilities of a business. This figure represents the minimum value of a company s.

Book value of equity meaning the book value of equity more widely known as shareholder s equity is the amount remaining after all the assets of a company are sold and all the liabilities are paid off. In other words as suggested by the term itself it is that value of asset which reflects in the balance sheet of a company or books of a company. A business that needs to start up or expand its operations can sell its equit.

In finance equity is ownership of assets that may have debts or other liabilities attached to them. 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. It is the enterprise value plus all cash and cash equivalents short and long term investments and less all short term debt long term debt and minority interests.

The book value of equity is equal to total assetsminus total liabilities preferred stocks and intangible assets. Equity value is the value of a company available to owners or shareholders. 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.

For example if someone owns a car worth 9 000 and owes 3 000 on the loan used to buy the car then the difference of 6 000 is equity. 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. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.