Plain-English definitions, reviewed by an independent investor
Book Value
Book value is a company’s net worth on paper: total assets minus liabilities.
Book value is a company’s net worth on paper: total assets minus liabilities.
Book Value = Total Assets − Total Liabilities
Why it matters
It is the floor reference for what a business owns outright.
Common confusion
Intangibles and depreciation make book value a rough, sometimes stale, number.
Frequently Asked Questions
Book value vs market cap?
Market cap is what the market pays; book value is the accounting net worth.
Negative book value?
Possible for firms with more liabilities than assets; treat as a red flag to investigate.