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Investing

Book Value

What is Book Value?

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

Understanding Book Value

Book value is an accounting measure of what shareholders would own if the company sold its assets at balance-sheet values and paid its debts. It is also called shareholders' equity.

Book value can understate companies whose main assets, such as brands, software, or research, are not fully recorded on the balance sheet.

Formula

Book value=Total assets−Total liabilities\text{Book value} = \text{Total assets} - \text{Total liabilities}
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