A company's book value

Question

Quizplus · Accepted Answer

Book value reflects the historical cost of a company's assets, which means the initial cost that the company incurred to acquire the assets. It does not take into account the current market value of the assets, which may be higher or lower than their historical cost. Therefore, book value may not be a good estimate of a company's fundamental value, and it does not include a value for goodwill. Additionally, book value is not necessarily equal to the total value of a company's assets, as some assets may have depreciated or become obsolete over time.

A Company's Book Value