Learn / Fundamentals / Valuation / Book Value
Book Value = Assets − Liabilities (per share often)
Book value is the accounting leftover for owners after you subtract what the company owes from what it owns. It is a balance-sheet snapshot, not a promised payout.
01 Feel it first
Click to add assets, liabilities, or intangibles. Book value is what remains for owners on the balance sheet.
02 Break the intuition
A thin book number can be normal for a brand business on purpose. Reveal why low book is not always a bargain.
03 Explore the stack
Tap each slice. What the company owns, what it owes, and what is left for shareholders.
Cash, inventory, property, and more. The gross pile before anyone else gets paid.
With $60 of assets and $35 of liabilities, book value is $25 per share. Learn this pile first. Then ask how the market price compares via P/B.
04 Build the formula
Tap the chips to see the accounting leftover rebuild. Toggle parts to watch book value move.
Book value = assets − liabilities. Here that is 60 − 35 = 25 per share. Negative book means liabilities exceed assets on the books.
05 Two flavors
Intangibles like goodwill and brands sit on the books too. Tangible book strips them out for a harder-asset view.
06 The catch
Book value is a balance-sheet tool. It shines where tangible assets dominate and fades where value lives off the books.
07 Check yourself
08 Where it breaks
Trademarks, software, and talent can be worth far more than the number on the balance sheet. Book value understates many modern businesses.
Write-downs often arrive late. Book value can look solid right before a big impairment charge.
In a rushed liquidation, factories and inventory often sell below book. You do not automatically pocket the accounting number.
Repurchasing shares reduces book value even when the business itself did not get worse. The pile moves without the factory changing.
Open any ticker for book value per share beside price and P/B, then compare banks, brands, and asset-heavy names.
Owners' accounting leftover is $25 per share here. Subtract $10 of intangibles and tangible book is $15.