Book Value Vs Equity
Note that the book value of assets indicates the recorded value that shareholders own in case of the company s liquidation.
Book value vs equity. While enterprise value gives an accurate calculation of the overall current value of a business similar to a balance sheet equity value offers a snapshot of both current and potential future. 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 total assets total liabilities.
No they mean different things. Equity is apparently defined in much the same way. As such book value only looks at the company s past while market value should be based on the company s future.
Net asset value. Book value per share. Is calculated as the difference between the assets and liabilities values the book value is used to determine the theoretical equity value attributable to the company s shareholders.
The book value of equity is equal to total assetsminus total liabilities preferred stocks and intangible assets. If a company has a high price to book ratio market price per share divided by book value of equity per share relative to its industry peers the market likely has high growth expectations for the company. Book value is equal to the total assets minus intangible assets minus liabilities.
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. 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. What does book value of equity mean.
Book value of equity represents the fund that belongs to the equity shareholders and is available for the distribution to the shareholders and it is calculated as the net amount remaining after the deduction of all the liabilities of the company from its total assets. Book value is the net value of a firm s assets found on its balance sheet and it is roughly equal to the total amount all shareholders would get if they liquidated the company. This is calculated by dividing the net value of all the securities in the portfolio by the number of shares outstanding.