Difference Between Book Value And Market Value
The difference between book value and market value.
Difference between book value and market value. In those cases the market sees no reason to value a company differently from its assets. Market value is that current value of the firm or any asset in the market on which it can be sold. Difference between book value vs market value.
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. Market value per share is the current value of the stock. Market value is the price that could be obtained by selling an asset on a competitive open market.
Book value is equal to the value of the firm s equity. The book value of an asset is its original purchase cost adjusted for any subsequent changes such as for impairment or depreciation. Book value is a definite number and can be calculated at any moment given the necessary data.
Is being bought and sold for on the market at a given time. In addition book value is frequently used to determine whether an asset is under or overpriced. 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 is equal to the value of the firm s equity while market value indicates the current market value of any firm or any asset. For example if a stock is trading at a share price of rs 100 then this is the market value per share of that company. Market value is the current valuation of the firm or assets the ongoing price of the share in the market on which it can be bought or 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. Oftentimes there are vast differences between the market value and book value mainly because the latter is based on the asset s historical cost. Book value equals market value.