What is "book value"?

[samoth25]

Could someone please explain the importance of book value(if any)and what other factors should this be veiwed with.

EG: sp 455 bv 131
sp .95 bv 167


am I right in thinking 2nd example is well priced


thanks

 

[tech/a]

Asset value according to its balance sheet.

Whats 167?
1,000s
1,000,000s
10,000,000s ?

 

[samoth25]

sorry should be sp 95c bv $1.67

 

[tech/a]

Hmmm

If the company was for sale would be worth a look!

 

[prawn_86]

Have to consider things like intangibles when looking at BV. EG - they may have assigned a figure to the worth of their brand but that figure may not be realistic and is impossible to predict. Same with property trusts. Its all well and good to say the properties are worth $x but when it comes to selling they may not get that much.

But yes, if BV is substantially higher than SP (share price) then there may be an opportunity there, and it is usually something like this that is the starting point for private equity raiders.