What is book value in share market?
“Book value” is different than “market value.” Market value per share is the price at which the company’s shares are traded in the stock market. Book Value per share is the price per share as carried in the company’s “books” or financial statements. Book value of a company is the value of its assets minus the value of its liabilities. Book value is typically less than market value because many of the assets are carried at historical costs and do not reflect current market value. Also, for many firms, the “value” or future earnings potential come from intangibles such as its people, process. These are not reflected in the book value. But these may be reflected in market value. Therefore market value diverges greatly from book value for technology firms. For financial firms that mark their assets to market value, the book value is closer to market value.
