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Book value

A company's assets minus its liabilities, as recorded on the balance sheet.

FundamentalsBeginner

Definition

Book value is the accounting value of shareholders' equity. Per share, it is compared with the stock price through the price-to-book ratio. It is most useful for asset-heavy businesses such as banks and insurers.

Watch out for

Accounting values can differ a lot from market value, especially for companies whose main assets are intangible, such as software and brands.

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