Book Value vs Market Value | Top Differences You Must Know!

In this video on Book Value vs Market Value, we are going to look at the top differences between book value and market value. Here we also discuss the examples and many more....

𝐁𝐨𝐨𝐤 𝐕𝐚𝐥𝐮𝐞 𝐯𝐬 𝐌𝐚𝐫𝐤𝐞𝐭 𝐕𝐚𝐥𝐮𝐞 𝐃𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐜𝐞𝐬
------------------------------------------------------------------------

Book value and Market value are key techniques, used by investors to value asset classes (stocks or bonds).

𝐁𝐨𝐨𝐤 𝐕𝐚𝐥𝐮𝐞 𝐃𝐞𝐟𝐢𝐧𝐢𝐭𝐢𝐨𝐧
-----------------------------------------

Book Value is the real worth of the assets of the company. Book Value is the actual worth of the asset of the company.

𝐌𝐚𝐫𝐤𝐞𝐭 𝐕𝐚𝐥𝐮𝐞 𝐃𝐞𝐟𝐢𝐧𝐢𝐭𝐢𝐨𝐧
----------------------------------------------

Market Value is defined as the maximum price at which an asset or security can be bought or sold in the market.

𝐊𝐞𝐲 𝐃𝐢𝐟𝐟𝐞𝐫𝐞𝐧𝐜𝐞𝐬 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐁𝐨𝐨𝐤 𝐕𝐚𝐥𝐮𝐞 𝐯𝐬 𝐌𝐚𝐫𝐤𝐞𝐭 𝐕𝐚𝐥𝐮𝐞
----------------------------------------------------------------------------------------------

1. Book value is the value of an asset reported in the balance sheet of the company. Whereas, Market Value is the current valuation of the company or assets in the market on which it can be bought or sold.

2. Book value gives us the actual worth of the assets owned by the firm whereas Market value is the projected value of the company’s or the assets worth in the market.

3. Book value is equal to the value of the company’s equity while Market value indicates the current market value of any company or any asset.

4. Book value shows the actual cost or acquisition cost of the asset whereas market value indicates the current market trends.

[dawnmarielagamba]

Thank you! Very helpful for my FP class!

[purudate]

Do you exclude intangible assets from the calculation of book value? If yes, Why?