Define average 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. Book value of a firm, in an ideal world, represents the value of the business the shareholders will be left with if all the assets are sold for cash and all debt is paid off today. Book value is also the net asset value of a company calculated as total assets minus intangible assets patents, goodwill and liabilities. The book value of a company is the total value of the companys assets, minus the companys outstanding liabilities. A companys book value might be higher or lower than its market value. Book value formula calculates the net asset of the company derived by total of assets minus the total liabilities. An assets book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation.

The guide not only lists the value of new vehicles, but it also lists used car values. Fair market value, on the other hand, is the current price at which that same asset can be. It is therefore a much more conservative way of valuing a company than using earnings based model where one needs to estimate future earnings and growth. That is, it is a statement of the value of the companys assets minus the value of its. It can be defined as the net asset value of the firm or of the company that can be calculated as total assets less. Net asset value in stocks and businesses, an expression of the underlying value of the company. Fair market value versus book value book value is the price paid for a particular investment or asset. Book value a companys total assets minus intangible assets and liabilities, such as debt. Book value formula how to calculate book value of a company.

A companys stock buybacks decrease the book value and total common share count. When book value is divided by the number of outstanding shares, we get the book value per share bvps which can be used to make a per share comparison. For assets, the value is based on the original cost of the asset less any depreciation, amortization or impairment costs made against the asset. In accounting, book value is the value of an asset according to its balance sheet account balance. The market sees no compelling reason to believe the companys assets are better or worse than what is stated on the balance sheet. The book value of common equity in the numerator reflects the original proceeds a company receives from issuing common equity, increased by earnings or decreased by losses, and decreased by paid dividends. The kelley blue book value is a price for a particular automobile make and model from the largest automotive valuation company in the u. Outstanding shares refer to a companys stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares.