Book Value
The net asset value of a company as reported on its balance sheet: total assets minus total liabilities.
What is Book Value?
Book value (also called shareholders' equity or net asset value) is the net worth of a company as recorded on its balance sheet — total assets minus total liabilities. It represents the theoretical liquidation value if a company sold all assets at their balance sheet values and paid off all debts. Book value per share divides total book value by shares outstanding. The price-to-book (P/B) ratio compares a stock's market price to its book value per share. Book value is a backward-looking measure based on historical cost; market value reflects future earnings expectations. Companies with strong intangible assets (brands, patents, IP) typically trade at high premiums to book value; tangible-asset-heavy companies like banks and insurers are more often valued near book.
Example
Apple's balance sheet as of September 2024 shows total assets of $364 billion and total liabilities of $308 billion, giving a book value (shareholders' equity) of $56 billion. With ~15 billion shares outstanding, book value per share is approximately $3.73. Apple's market capitalization of ~$3.5 trillion implies a price-to-book ratio of roughly 60x — reflecting the enormous value of its brand, ecosystem, and earnings power not captured on the balance sheet.
Source: Apple 10-K FY2024