Book Value Vs Market Value Stocks

Book value is the value of the company according to its balance sheet.

Book value vs market value stocks. Market value per share is the current value at which the stock is trading in the market. The market value of stock is the current price of stock on the open market. This metric differs from market value because it s the shareholder s equity whereas market value is the real time.

Face value and book values are more of a static theoretical numbers. The difference between market value and book value can depend on various factors such as the company s industry the nature of a company s assets and liabilities and the company s specific. Book values are less accurate in reflecting true net worth of a business as they reflect past costs not the current fair market values.

Face value is the value of a company listed in its books of the company and share certificate. Book value is a measurement frequently used by value investors. Face value and book value are entries made in companies balance sheet for the sake of bookkeeping only.

And finally the book value of a company is the total value of the company s assets that shareholders will receive in case the company gets liquidated. The market value is the value of a company according to the markets based on the current stock price and the number of outstanding shares. Book value is a starting point and the market value will aid the investor in determining whether or not the investment is of value or if it is a momentum investment at this juncture.

There are rules based on which these value shall be recorded in the companies book of accounts. Whereas intrinsic value and market value are more liquid and real numbers. Book value and market value are key techniques used by investors to value asset classes stocks or bonds.

The book value of stock is the book value of the company divided by the number of outstanding shares. Market value is the value of a stock or a bond based on the traded prices in the financial markets. Fair market values are more accurate in reflecting true net worth as they consider prevalent market prices.