Financial Glossary
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Book Value
- 1. The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation.
2. The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.
3. The initial outlay for an investment. This number may be net or gross of expenses such as trading costs, sales taxes, service charges and so on.
Also known as "net book value (NBV)".
In the U.K., book value is known as "net asset value".
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Book Value Of Equity Per Share - BVPS
- A financial measure that represents a per share assessment of the minimum value of a company's equity. More specifically, this value is determined by relating the original value of a firm's common stock adjusted for any outflow (dividends and stock buybacks) and inflow (retained earnings) modifiers to the amount of shares outstanding.
Calculated as:
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Book Value Per Common Share
- A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly.
Formula:
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Price to Tangible Book Value - PTBV
- A valuation ratio expressing the price of a security compared to its hard, or tangible, book value as reported in the company's balance sheet. The tangible book value number is equal to the company's total book value less the value of any intangible assets. Intangible assets can be such items as patents, intellectual property, goodwill etc. The ratio is calculated as:
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Tangible Book Value Per Share - TBVPS
- A method of valuing a company on a per-share basis by measuring its equity after removing any intangible assets.
The tangible book value per share is calculated as follows:
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