Book value is the total value of a company's assets minus its liabilities, as shown on its balance sheet. It represents what would theoretically be left for shareholders if the company liquidated at the values listed on its financial statements. Book value per share divides this total by the number of outstanding shares.
A company has $10 million in assets and $4 million in liabilities, giving it $6 million in book value. If it has 1 million shares outstanding, the book value per share is $6. This tells you what each share's portion of net assets is worth according to the company's accounting records.
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