Securing Hannav Ledger...
Securing Hannav Ledger...
Glossary
Book value is the net asset value of a company on its balance sheet, equal to total assets minus total liabilities, often expressed per share.
Book value is the accounting worth of a company's assets minus what it owes — a rough floor reference for valuation.
Book value reflects historical cost accounting, not market or replacement value. Intangible-heavy firms may trade far above book value; asset-heavy cyclicals may trade below book during downturns.
If total assets are ₹10,000 crore and liabilities ₹6,000 crore, book value is ₹4,000 crore. With 200 crore shares, book value per share is ₹20.
Book Value per Share = (Total Assets − Total Liabilities) ÷ Shares OutstandingP/B compares market price to book value per share. Below 1 may suggest undervaluation or distress; above 3 is common for asset-light quality franchises.
Banks hold mark-to-market financial assets where book value closely tracks economic value, making P/B a key metric for the sector.
Not necessarily for services and tech firms with few tangible assets. Book value is less meaningful when intangibles drive earnings.