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Book Value

Book value is a company’s net worth calculated based on its total assets minus liabilities.

You might also hear book value called net asset value if you’re hanging out in the UK.

 

Book value serves a few important purposes. For one, it lets shareholders know what your company would be worth if it was liquidated like right now. It can also be compared to market value to tell whether your stock is over or under priced.

The name comes from when records where literally kept in books. If you’re not familiar, books are bound paper that have a lot of squiggles on each page that can be translated into meaning if you know how to read words.

 

Example:

COMPANY: But I’m so much more than just my book value! Look into my soooooooul!