book value
Definition 1
A company's common stock equity as it appears on a balance sheet, equal to total assets minus liabilities, preferred stock, and intangible assets such as goodwill. This is how much the company would have left over in assets if it went out of business immediately. Since companies are usually expected to grow and generate more profits in the future, market capitalization is higher than book value for most companies. Since book value is a more accurate measure of valuation for companies which aren't growing quickly, book value is of more interest to value investors than growth investors.
Definition 2
The value of an asset as it appears on a balance sheet, equal to cost minus accumulated depreciation.
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Related Terms
adjusted book value, intrinsic value, price to book ratio, net worth
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