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Definition of Book value
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A
An assetâ€™s cost basis minus accumulated depreciation.
The value of an asset as carried on the balance sheet of a
An assetâ€™s original cost, less any depreciation that has been subsequently incurred.
Net worth of the firmâ€™s assets or liabilities according
The ratio of stockholder equity to the average number of common shares. book value
The current book value of an asset or liability; that is, its original book value net of any
The theoretical amount per share that each stockholder would receive if a companyâ€™s assets were sold on the balance sheetâ€™s date. book value equals:
Generally speaking, these terms
The book value of a company divided by the number of shares
The average project earnings after taxes and depreciation divided by the average
Ratios that are designed to measure the relative claims of stockholders to earnings
The process whereby the book value or collateral value of a security is adjusted to reflect
Market price of a share divided by book value per share.
An accounting method for reporting acquisitions accomplished through the use of equity.
Compares a stock's market value to the value of total assets less total liabilities (book
Generally, book income as a proportion of net book value.
Balance sheet item that includes the book value of ownership in the corporation. It
A manager who seeks to buy stocks that are at a discount to their "fair value" and sell them at
Decreasing the book value of an asset if its book value is overstated compared to current market values.
An accelerated depreciation method that calculates depreciation each year by applying a fixed rate to the assetâ€™s book (costâ€“accumulated depreciation) value. Depreciation stops when the assetâ€™s book value reaches its salvage value.
A contra, or offset, account that is coupled
A term often used instead of the more formal and correct
market capitalization, or market cap
Current market value per share of
Generally refers to the book value of ownersâ€™ equity as reported
Refers to the capital invested in a business by its shareowners
A cost that has been paid and cannot be undone or reversed.
Basic Earnings Power Ratio
Percentage of earnings relative to total assets; indication of how
The percentage of debt that is used in the total capitalization of a
Fixed Assets Turnover Ratio
A measure of the utilization of a company's fixed assets to
Inventory Turnover Ratio
Provides a measure of how often a company's inventory is sold or
Market to Book Ratio
Measure of the book value of a company on a per share basis. It is
A measure of how easily a company can use its most liquid current
Return on Common Equity Ratio
A measure of the percentage return earned on the value of the
Return on Total Assets Ratio
A measure of the percentage return earned on the value of the
Total Asset Turnover Ratio
A measure of the utilization of all of a company's assets to
The profit earned on the sale of an asset, computed by subtracting its book value
The excess of the price paid to buy another company over the book value of
book rate of return
Accounting income divided by book value.
market value added
Market value of equity minus book value.
book value of common stockholdersâ€™ equity plus preferred stock.
A special, nonrecurring charge taken to write down an asset with an overstated
book yield is the investment income earned in a year on a portfolio of assets purchased over a number of years and at different interest rates, divided by the book value of those assets.
NPV (net present value of cash flows)
Same as PV, but usually includes a subtraction for an initial cash outlay.
PV (present value of cash flows)
the value in todayâ€™s dollars of cash flows that occur in different time periods.
Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity
With respect to convertible bonds, the value the security would have if it were not convertible
A banker or trader's positions.
cash A firm's cash balance as reported in its financial statements. Also called ledger cash.
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.
The managing underwriter for a new issue. The book runner maintains the book of securities sold.
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the
An amount the insurance company will pay if the policyholder ends a whole life
Also called parity value, the value of a convertible security if it is converted immediately.
The amount of advantage over a current market transaction provided by an in-the-money
The weighted average of a probability distribution.
Expected value of perfect information
The expected value if the future uncertain outcomes could be known
Extraordinary positive value
A positive net present value.
See: Par value.
Firm's net value of debt
Total firm value minus total firm debt.
The amount of cash at a specified date in the future that is equivalent in value to a specified
Intrinsic value of an option
The amount by which an option is in-the-money. An option which is not in-themoney
Intrinsic value of a firm
The present value of a firm's expected future net cash flows discounted by the
Limit order book
A record of unexecuted limit orders that is maintained by the specialist. These orders are
Net amount that could be realized by selling the assets of a firm after paying the debt.
The amount a policyholder may borrow against a whole life insurance policy at the interest rate
1) The price at which a security is trading and could presumably be purchased or sold.
Market value ratios
Ratios that relate the market price of the firm's common stock to selected financial
Market value-weighted index
An index of a group of securities computed by calculating a weighted average
A bank runs a matched book when the distribution of maturities of its assets and liabilities are equal.
Related: par value.
Net adjusted present value
The adjusted present value minus the initial cost of an investment.
Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share
Net present value (NPV)
The present value of the expected future cash flows minus the cost.
Net present value of growth opportunities
A model valuing a firm in which net present value of new
Net present value of future investments
The present value of the total sum of NPVs expected to result from
Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs
Net salvage value
The after-tax net cash flow for terminating the project.
See: unmatched book.
Original face value
The principal amount of the mortgage as of its issue date.
Also called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date.
The amount of cash today that is equivalent in value to a payment, or to a stream of payments,
Present value factor
Factor used to calculate an estimate of the present value of an amount to be received in
Present value of growth opportunities (NPV)
Net present value of investments the firm is expected to make
Price value of a basis point (PVBP)
Also called the dollar value of a basis point, a measure of the change in
The attractiveness measured in terms of risk, liquidity, and return of one instrument relative to
Current cost of replacing the firm's assets.
Usually refers to the value of a lessor's property at the time the lease expires.
Scrap value of plant and equipment.
See: unmatched book.
Also called the normal deviate, the distance of one data point from the mean, divided by
Set of books kept by firm management for its annual report that follows Financial
Also called investment value, the value of a convertible security without the con-version option.
Set of books kept by a firm's management for the IRS that follows IRS rules. The stockholder's
The value of a bond at maturity, typically its par value, or the value of an asset (or an entire
Time value of an option
The portion of an option's premium that is based on the amount of time remaining
Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar
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