Book Value

The net asset value of a company — total assets minus total liabilities.

What Is Book Value?

Book value represents the net worth of a company according to its balance sheet — total assets minus total liabilities. Think of it as what would theoretically remain if the company sold everything it owned and paid off all its debts.

Book Value = Total Assets - Total Liabilities

Book Value Per Share

To make book value comparable across companies, investors look at book value per share (total book value ÷ shares outstanding). Comparing the stock price to book value per share gives you the Price-to-Book (P/B) ratio — a key valuation metric for financial companies.

When Book Value Matters

Book value is most useful for asset-heavy industries like banking, insurance, and real estate, where tangible assets make up a large portion of the company's value. For tech companies, book value is less meaningful since their most valuable assets (intellectual property, brand, talent) don't fully appear on the balance sheet.