book value

Measures the net worth of the firm’s assets—net shareholder’s equity. Book value is equal to total assets less liabilities. In theory, book value is equivalent to the amount of cash shareholders would receive if all of the company’s debts, both short-term and long-term, were paid off and all remaining assets were sold. The price-to-book-value (P/B) ratio compares a stock’s price to its book value per share; it's used by value investors as a measure of a stock's undervaluation or overvaluation.