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| Source: Wikihow |
Lets derive the meaning from the term itself.
Books implies Account statements records and ultimately the Balance sheet.
Value implies the monetary worth shown in the records and finally in Balance sheet.
For definition click
Hence,
The book value of the company is the net worth that appears in the balance sheet.
Net worth is actually the Net Asset that a company has.
Obvious question here: Why Net Assets ?
Because, this is the only thing that a company actually possesses and can liquidify into some value.
Another question arises: How this Book Value calculated ?
Answer:
Finally the book value of the company is the value in books of accounts that a company can convert in some value and give it to its shareholders.For definition click
Hence,
The book value of the company is the net worth that appears in the balance sheet.
Net worth is actually the Net Asset that a company has.
Obvious question here: Why Net Assets ?
Because, this is the only thing that a company actually possesses and can liquidify into some value.
Another question arises: How this Book Value calculated ?
Answer:
BV = COA - DOA
BV = Book Value
COA = Cost of Asset (i.e Valuation of Asset)
DOA = Depreciation Value of Asset
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