Fundamentals & valuation
What is Book value?
Hinglish mein padhein: Book value kya hoti hai?
Book value is a company's total assets minus total liabilities — shareholders' equity on the balance sheet.
Book value per share = shareholders' equity ÷ number of shares.
For asset-light businesses like software or FMCG brands, book value understates what the company is worth.
Related terms
- P/B ratioPrice-to-book compares the share price with the company's book value (net assets) per share.
- ROE (Return on equity)ROE is net profit divided by shareholders' equity. It shows how much profit the company makes on the money shareholders have invested.
- Balance sheetThe balance sheet lists what a company owns (assets), what it owes (liabilities) and the shareholders' equity at a point in time.