Definition
The net value of a company’s assets as recorded on its balance sheet, often used to assess its intrinsic value.
What to consider
- Compare a company’s book value to its market price for valuation insights.
- Review financial statements to understand asset composition.
- Use it as one indicator among many when assessing an investment.
Real world scenarios
- Before purchasing shares in a company, Liam reviewed its book value to better understand the net worth of its assets and liabilities.
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