Book Value


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Related to Book Value: market value, Book value per share

Book Value

The current value of an asset. The book value of an asset at any time is its cost minus its accumulated depreciation. (Depreciation reflects the decrease in the useful life of an asset due to use of the asset.) Companies use book value to determine the point at which they have recovered the cost of an asset.

The net asset value of a company's Securities. This is calculated by subtracting from the company's total assets the following items: intangible assets (such as goodwill), current liabilities, and long-term liabilities and Equity issues. This figure, divided by the total number of bonds or of shares of stock, is the book value per bond or per share of stock.

The calculation of book value is important in determining the value of a company that is being liquidated. For example, if a corporation has 100,000 shares of stock issued and outstanding and its assets total $5 million and its intangible assets and all liabilities total $1.6 million, its net asset value is $3.4 million and its book value per share is $34.

book value

n. a determination of the value of a corporation's stock by adding up the stated value of corporate assets as shown on the books (records) of a corporation and deducting all the liabilities (debts) of the corporation. This may not be the true value of the corporation or its shares since the assets may be under- or over-valued.

References in periodicals archive ?
In the PNSB deal, Air Selangor paid a price equivalent to 0.86 times of the net book value of PNSB's water concession business, i.e.
There is a common belief in the market that stocks that trade at less than their book values are perceived to be cheap, while stocks that trade way above their book values are deemed overpriced.
A stock may trade below its book value for several reasons, the foremost being lack of investor confidence in the company's future.
In the first model, market value of the sample firm (MVBV) is regressed on the book value of equity (BV), earnings (NI), and stock repurchases (REPURCH).
"Although companies carefully underwrite the plans they insure and contracts exclude certain event risks to protect the insurer, we believe book value wraps expose insurers to substantial tail risk because they do not allocate sufficient capital to the business to cushion against potential losses in extreme adverse scenarios," Moody's Vice President and author of the report, Ann Perry said in a statement.
Miller believes that shares are undervalued at these levels and estimate a burn-down book value of $2.20, including additional asset sales and the DTA benefit.
As such, earnings are not really as important and book value can hardly be a measure of a firm's true wealth (Barron et al., 2002).
But these investments do something more: once an owner factors in available incentives and tax credits, they actually increase the property's book value by more than it costs to implement the investment.
He goes on to show that the value of a stock can be written in terms of its book value and capitalized current earnings, adjusted for dividends.
The results from the year-end financials show XYZ's earnings and book value are $2.4 million and $76.3 million, respectively.
Three book value products--New York Life's LifeStages/MainStay Single Premium Fixed Annuity, John Hancock's GPA Plus and Genworth Financial's Capital Provider Advantage--ranked second, third and fourth, respectively, says Beacon Research, the Evanston, Ill., firm that ran the study.
The use of book value left out significant assets--in this case, the oil reserves.