What is the book value of a firm?

Question

Quizplus · Accepted Answer

The book value of a firm is the difference between the value of its assets and the value of its liabilities. This represents the amount of equity that the owners have in the business based on the recorded values of the assets and liabilities on the balance sheet. It is a measure of the value of the company's assets that shareholders would receive if the company were to go bankrupt and sell off its assets. The book value is not necessarily an accurate measure of the company's overall value because it does not take into account factors such as brand value, intellectual property, and future earnings potential.

What Is the Book Value of a Firm