Book value financial definition of book value financial dictionary. By definition, book value is total assets minus liabilities, or net worth. Search book value and thousands of other words in english cobuild dictionary from reverso. You can complete the definition of book value given by the english cobuild dictionary with other english dictionaries.
Net asset value in stocks and businesses, an expression of the underlying value of the company. You can complete the definition of book value given by the english definition dictionary with other english dictionaries. Book bank noun meaning, pronunciation and more by macmillan dictionary. Home accounting dictionary what is tangible book value. Book value can refer to several ways to analyze a business, but when it comes to bank stocks, the book value pertains to the net asset value of the company. How to figure the book value of bank stock finance zacks. Book value of a firm that allows for valuation of goodwill, inventories, real estate, and other assets at their current market value. A companys book value might be higher or lower than its market value. In the world of investments there are two primary ways in which investors analyze value. Book value refers to the total amount a company would be worth if it liquidated its assets and paid back all its liabilities. Intrinsic business value is an economic concept, estimating future cash output discounted to present value. An assets book value is equal to its carrying value on the balance sheet, and companies calculate it by netting the asset against its. The book value refers to the tangible asset value of any company.
Search bankbook and thousands of other words in english definition and synonym dictionary from reverso. A companys common stock equity as it appears on a balance sheet, equal to total assets minus liabilities, preferred stock, and intangible assets such as goodwill. Because of this tangible factor to book value, it is often referred to as net tangible assets. Market value is the price you could get for it by selling it on the open market.
The price for which an item or service should be bought or sold, usually as related in a printed collection of prices for similar items or services. This number is defined as the difference between the book value of assets and the book value of liabilities. The value left after this calculation represents what the company is intrinsically worth. Bankbook definition and meaning collins english dictionary. Book value definition is the value of something as shown on bookkeeping records as distinguished from market value. Book value of a company may also refer to its total net asset value. That is, it is a statement of the value of the companys assets minus the value of its. Definition and synonyms of bank from the online english dictionary from macmillan education. Bv is computed by deducting accumulated depreciation from the purchase price of the asset. In business, the book value of an asset is the value it is given in the account books of. Bankbook definition of bankbook by the free dictionary.
Introduction the process of assigning a value to a share of common stock involves more art. A banks cash flows tend to be highly volatile and related to macroeconomic factors. Book value of an asset is the value at which the asset is carried on a balance sheet and calculated by taking the cost of an asset minus the accumulated depreciation. Written down value of an asset as shown in the firms balance sheet. It helps to understand the difference between book value and market value. Book value definition, the value of a business, property, etc. The bank expects to write off massive amounts of money as bad debt from its loan book value and shrink its asset base after correct recalculation of the loans. In this scenario, the socalled priceto book pb ratio is applied with a bank s stock price compared to equity book value per share.
The book value is essentially the tangible accounting value of a firm compared to the market value that is shown. When six parties are bidding on the same piece of real estate, it can become a matter of needing to win, rather than making a good. The book value of an asset is the amount of cost in its asset account less the accumulated. Book value definition is the value of something as shown on bookkeeping records as distinguished from market value how to use book value in a sentence. Search book value and thousands of other words in english definition and synonym dictionary from reverso. Any opinions in the examples do not represent the opinion of the cambridge dictionary editors or of cambridge university press or its licensors. Make book definition, to bring into existence by shaping or changing material, combining parts, etc to make a dress. Since the book value of equity is more reliable than. A book held by a depositor in which his or her deposits and withdrawals are recorded by the bank. The book value of an asset at any time is its cost minus its accumulated depreciation.
Book value a companys total assets minus intangible assets and liabilities, such as debt. Dictionary term of the day articles subjects businessdictionary business dictionary dictionary toggle navigation. Book value is a key measure that investors use to gauge a stocks valuation. Bank book definition of bank book by the free dictionary. Book value per share is a good measure to value bank stocks. The amount of owners equity or stockholders equity reported on a companys balance sheet. This is not an indication of the companys fair market value. These examples are from the cambridge english corpus and from sources on the web. Definition of bank written for english language learners from the merriamwebster learners dictionary with audio pronunciations, usage examples, and countnoncount noun labels. I assumed that when you say banks are valued, it refers to the market value of the banks. Unless you hide it under your mattress, you probably keep your money in a bank, or a business that stores and invests money. This effectively involves transferring the banks loan book or part of it to a. Because, according to the provisions of gaap, an assets bv cannot show any increase or decrease in the assets market value, it rarely reflects the. Essentially, an assets book value is the current value of the asset with respect.
Market value is the value of the asset on the market. In fact, some are above the book value of the banks. Depreciation reflects the decrease in the useful life of an asset due to use of the asset. Wikipedia, lexilogos, oxford, cambridge, chambers harrap, wordreference, collins lexibase dictionaries, merriam webster. How to figure the book value of bank stock pocketsense. Meaning, pronunciation, picture, example sentences, grammar, usage notes, synonyms and more. The book value of a company is the total value of the companys assets, minus the companys. The english property loans account for as much as 28 per cent of its current loan book. Tangible book value, also known as net tangible equity, measures a firms net asset. Since companies are usually expected to grow and generate more. These securities are accounted for in a different way than those in the trading book, which are traded on.
Definition of book value in accounting, book value refers to the amounts contained in the companys general ledger accounts or books. Book value definition of book value by merriamwebster. Book value is calculated by taking a companys physical assets including land, buildings, computers, etc. Valuing a bank is different than valuing other kinds of stocks. Tangible value here is used to refer to any assets that can be felt, seen, or touched, such as inventory, plants, equipment, cash, offices, or properties. An accounting book that includes all securities that are not actively traded by the institution, that are meant to be held until they mature.
Book value is calculated by subtracting any accumulated depreciation from an assets purchase price or historical cost. Book value, often called carrying value is an accounting term that refers to the value of an asset, going by the data on its corresponding balance sheet. Book value or carrying value is the net worth of an asset that is recorded on the balance sheet. Microsoft and cocacola are inside value recommendations. You can complete the definition of bankbook given by the english definition dictionary with other english dictionaries.
Bank definition in the cambridge english dictionary. While the ddm is more common, the residual income model is arguably more accurate because most of the. Book value definition and meaning collins english dictionary. In relation to your question, it is however noted that not all banks are valued below book value. The value of an asset is based on its original purchase costs, minus depreciation, amortization and other similar devaluing costs. Price to book value is a valuation ratio that is measured by stock price book value per share.
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