Book value

That part of a company's assets which belongs to its shareholders; in the UK these are generally known as shareholders' funds or, simply, net assets. It is an accounting valuation arrived at by taking the gross assets of the business as shown in its balance sheet and subtracting all the prior claims on the business, such as bank debt, payables, allowances for future claims, and so on. Alternatively, it is the sum of the shares outstanding, additional paid-in capital and retained earnings. Book value is usually expressed in per share terms so as to make an easy comparison with the market price of the shares (see Price to book ratio).