A company's common stock equity as it appears on a balance sheet,
equal to total assets minus liabilities, preferred stock, and
intangible assets such as goodwill. This is how much the company
would have left over in assets if it went out of business
immediately. Since companies are usually expected to grow and
generate more profits in the future, most companies end up being
worth far more in the marketplace than their book value would
suggest. For this reason, book value is of more interest to value
investors than growth investors.
The value of an asset as it appears on a balance sheet, equal to
cost minus accumulated depreciation. Book value often differs
substantially from market price, especially in knowledge
industries such as high-tech.
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