Book value (shareholders' equity, net assets) is a company's total assets minus total liabilities — the accounting value of what shareholders own. Per-share book value = total equity / shares outstanding. Book value matters more for asset-heavy businesses (banks, insurers, REITs) than for asset-light businesses (software, services). Price-to-Book (P/B) ratio compares stock price to book value per share: P/B below 1 may indicate value or trouble; P/B above 3 suggests growth premium. Book value undervalues intangible assets (brand, IP, network effects) — modern S&P 500 trades at 4× book on average, reflecting the dominance of intangible-asset businesses.
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Book Value
August 22, 2026 · Aditya Gupta
Investing
Related terms
401(k)
A 401(k) is an employer-sponsored retirement plan where employees contribute pre-tax salary that grows tax-deferred until withdrawal. The…
Active Management
Active management is the attempt to outperform a benchmark through stock selection, sector rotation, market timing, or any…
Alpha
Alpha is excess return relative to a benchmark, adjusted for risk (beta). Positive alpha means an investment outperformed…
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Asset allocation is the percentage split of your portfolio across asset classes — typically stocks, bonds, and cash,…
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