The main limitation in using book value per share for stock valuation models is the potential difference between recorded value and market value for both assets and liabilities.

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Book value per share is calculated by dividing the total equity of a company by its number of outstanding shares. However, the book value of assets and liabilities may not reflect their current market value, which can result in inaccuracies when using book value per share as a basis for stock valuation models. Therefore, it is essential to consider other factors, such as earnings and cash flow, when evaluating a company's financial health and potential for future growth.

The Main Limitation in Using Book Value Per Share for Stock