Book value represents what shareholders would theoretically receive if a company liquidated all assets and paid all debts. It is calculated from the balance sheet as total assets minus total liabilities. The price-to-book ratio compares market price to book value, with values below 1.0 potentially indicating undervaluation.
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Quick Reference
Category
valuation
Difficulty
Beginner
Reading Time
1 min
Related Terms
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Where You'll See This
This concept appears throughout stock detail pages and financial data.