The shares of listed holding company shall not exceed of its book value or market value
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Valuing a listed company is a complex task, and several different measures are used to arrive at a fair valuation. While none of the methods is precise and each presents a different version with varying results, investors use them in combination to get a good understanding of how the stocks have been fairing. Two most commonly used quantitative measures for valuing a company are market value and book value. This article compares the two popular factors, their differences and how they can be used in analyzing companies.
INVESTING FINANCIAL ANALYSIS
Market value versus book value
Valuing a listed company is a complex task, and several different measures are used to arrive at a fair valuation. While none of the methods is precise and each presents a different version with varying results, investors use them in combination to get a good understanding of how the stocks have been fairing. Two most commonly used quantitative measures for valuing a company are market value and book value. This article compares the two popular factors, their differences and how they can be used in analyzing companies.
Book Value
Book value literally means the value of a business according to its books (accounts) that is reflected through its financial statements. Theoretically, book value represents the total amount a company is worth if all its assets are sold and all the liabilities are paid back. This is the amount that the company’s creditors and investors can expect to receive if the company goes for liquidation.
Book Value of Equity Per Share (BVPS)
Book Value Formula
Mathematically, book value is calculated as the difference between a company's total assets and total liabilities.
INVESTING FINANCIAL ANALYSIS
Market value versus book value
Valuing a listed company is a complex task, and several different measures are used to arrive at a fair valuation. While none of the methods is precise and each presents a different version with varying results, investors use them in combination to get a good understanding of how the stocks have been fairing. Two most commonly used quantitative measures for valuing a company are market value and book value. This article compares the two popular factors, their differences and how they can be used in analyzing companies.
Book Value
Book value literally means the value of a business according to its books (accounts) that is reflected through its financial statements. Theoretically, book value represents the total amount a company is worth if all its assets are sold and all the liabilities are paid back. This is the amount that the company’s creditors and investors can expect to receive if the company goes for liquidation.
Book Value of Equity Per Share (BVPS)
Book Value Formula
Mathematically, book value is calculated as the difference between a company's total assets and total liabilities.
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