book value

noun

Definition of book value 

: the value of something as shown on bookkeeping records as distinguished from market value:

a : the value of an asset equal to cost minus depreciation

b : the value of a corporation's stock equal to its book value minus its liabilities

Examples of book value in a Sentence

I paid $4,100 for the car four years ago, but its book value is now under $500.

Recent Examples on the Web

Shares in Land Securities and British Land currently change hands about 35% below the September book values reported this week. Stephen Wilmot, WSJ, "Amazon Is Bigger Problem Than Brexit for U.K. Property," 15 Nov. 2018 The stock lost more than half its value during his tenure and trades at about a third of the value of its assets; in contrast JPMorgan Chase & Co. trades at more than 1.5 times its book value. Steven Arons, Bloomberg.com, "Deutsche Bank Solves One Crisis With New CEO. Now Onto the Next," 9 Apr. 2018 One is measuring Berkshire’s own book value and how this increases. The Economist, "Inside Warren Buffett’s deal machine," 8 Mar. 2018 Generali’s German sale values the unit at just €1 billion, which UBS said was 60% of its regulatory book value. Paul J. Davies, WSJ, "How to Escape the Low-Rate Hell in Life Insurance," 5 July 2018 Despite this, Wells Fargo shares still aren’t cheap at 1.5 times book value, a ratio that already anticipates their new, higher return targets. Aaron Back, WSJ, "Still Too Early to Get Back on Wells Fargo’s Wagon," 10 May 2018 These levels of profitability are enough to justify their current valuations of 1 and 1.7 times book value, respectively. Aaron Back, WSJ, "Banks Still Waiting for Tax-Overhaul Borrowing Boost," 13 Apr. 2018 Fairchild believes unreliable book values mean some companies classified as growth stocks are actually value stocks. Bloomberg, latimes.com, "What's a stock worth? In the new economy, traditional accounting has its critics," 8 June 2018 The firm bought its position at around book value per share, which was $71.67 in the first quarter. David Benoit, WSJ, "Activist Sets Sights on Citigroup," 7 May 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'book value.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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First Known Use of book value

1839, in the meaning defined above

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Last Updated

8 Dec 2018

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The first known use of book value was in 1839

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More Definitions for book value

book value

noun

Financial Definition of book value

What It Is

Book value refers to the total amount a company would be worth if it liquidated its assets and paid back all its liabilities. Book value can also represent the value of a particular asset on the company's balance sheet after taking accumulated depreciation into account.

How It Works

Book value is calculated by taking a company's physical assets (including land, buildings, computers, etc.) and subtracting out intangible assets (such as patents) and liabilities -- including preferred stock, debt, and accounts payable. The value left after this calculation represents what the company is intrinsically worth.

Thus, book value is calculated:

Book value = total assets - intangible assets - liabilities

Why It Matters

Since book value represents the intrinsic net worth of a company, it is a helpful tool for invThe definition of book value on InvestingAnswersestors wanting to determine if a company is underpriced or overpriced, which could indicate a potential time to buy or sell. For instance, value investors search for companies trading for prices at or below book value (indicating a price-to-book ratio of less than 1.0), which implies the shares are selling for less than the company's actual worth.

Source: Investing Answers

book value

noun

English Language Learners Definition of book value

finance : the amount of money that something (such as a car) is officially worth based on its age, style, condition, etc.

book value

noun

Legal Definition of book value 

: the value of something as shown on bookkeeping records as distinguished from market value: as

a : the value of an asset equal to cost less depreciation

b : the value of a corporation's capital stock expressed as its original cost less depreciation and liabilities

More from Merriam-Webster on book value

Rhyming Dictionary: Words that rhyme with book value

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