Book value is the value of an asset or company as recorded on a balance sheet. For a company it equals total assets minus total liabilities. For a single asset it equals the original purchase cost minus all accumulated depreciation charged to date.

How is book value different from market value?

Market value reflects what buyers are willing to pay right now; book value reflects historical cost adjusted for depreciation and debt. Growth companies often trade at large premiums to book value, while asset-heavy firms may trade near or below it.

What does book value per share mean?

Book value per share (BVPS) divides total shareholders' equity by the number of outstanding shares. It indicates the minimum liquidation value per share if the company were wound down at balance-sheet values.

What is a good price-to-book ratio?

A P/B ratio below 1.0 can signal undervaluation (market price is below accounting value), while ratios above 3–5 are common for high-growth or asset-light businesses. Always compare within the same industry.

Does accumulated depreciation reduce book value?

Yes. Every period of depreciation expense reduces the carrying (book) value of an asset. At full depreciation the asset is listed at its salvage value or zero, whichever is lower.

Can book value be negative?

Yes. If a company's total liabilities exceed its total assets, shareholders' equity (book value) is negative. This often signals financial distress or heavy use of debt financing.

Book Value Calculator

Name: Book Value Calculator
Availability: InStock
Author: Nham Vu

Enter total assets, accumulated depreciation, and total liabilities to instantly calculate net book value and book value per share.

Calculation Mode

Original Cost ($)

Accumulated Depreciation ($)

Salvage Value ($) (optional)

Enter values and click Calculate
to see results here.

Summary

Enter total assets, accumulated depreciation, and total liabilities to instantly calculate net book value and book value per share.

How it works

Select the calculation mode: Asset Book Value or Company Book Value.
Enter the required figures (cost/total assets, depreciation, liabilities, shares outstanding).
Click Calculate to see net book value, depreciation impact, and book value per share.
Adjust any field and recalculate to compare different scenarios.
Use the results in financial analysis, investment screening, or accounting reconciliation.

Use cases

Determine the carrying value of equipment or machinery on a balance sheet.
Estimate shareholders' equity for a company without a live stock data feed.
Compare book value per share against market price to assess over/undervaluation.
Prepare for accounting audits by verifying net asset values.
Analyze real estate holdings: subtract depreciation to find current book value.
Screen stocks trading below book value (Price-to-Book < 1).
Calculate residual value of a fleet of vehicles for insurance purposes.
Teach basic accounting concepts with hands-on numerical examples.

Frequently Asked Questions

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Last updated: 2026-05-23 · Reviewed by Nham Vu