Book Value

When discussing a particular asset, book value is the value ascribed to that asset on the company's balance sheet. When used in reference to a company, book value is the company's net asset value.

Significance

Book value is generally viewed as the minimum that an asset or company should be worth on the open market. If a company's stock has a total value of $500 million but the company has assets with a book value of $700 million, it's a fair bet that the company's stock is either a screaming buy, its assets are misunderstood, or the company may soon become insolvent -- or any combination thereof.

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