Book value is also the net asset value of a company calculated as total assets minus intangible assets. Asset book value definition what is asset book value. The booktomarket ratio is used to find the value of a company by comparing its book value to its. This is the amount that the companys creditors and investors can expect to receive if the company is liquidated.
The priceto book ratio pb ratio is a ratio used to compare a stocks market value to its book value. Pbv is arrived at by dividing the market price of a share with the respective companys book value per share. 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. Pricetobook value pb is the ratio of the market value of a companys shares share price over its. Pricetobook ratio pb ratio definition investopedia. Be the first to check out our latest videos on investopedia video. Book value per common share is a measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. The difference between an investments book and market values reveals the profit or loss incurred. It is calculated by dividing the current closing price of.