Glossary

Book value, also known as net asset value, represents the net worth of a company based on its balance sheet. 💼

It's calculated by subtracting a company's total liabilities from its total assets. Book value can be used to estimate the underlying value of a company, and it's often compared to market value to determine if a stock is overvalued or undervalued.

For example, if a company has $10 million in assets and $6 million in liabilities, its book value would be $4 million.

Fun fact: The term "book value" comes from the days when companies maintained their financial records in physical ledger books. 📚 Today, book value is just one of many financial metrics investors use to analyse a company's financial health and make investment decisions.