Equity · Core
Book Value
Book value is accounting equity — assets minus liabilities on the books, not what a willing buyer would pay tonight.
Definition
Book value per share is equity / shares. Tangible book subtracts goodwill and some intangibles. Historical cost and OCI marks make book a mix of yesterday’s prices and today’s rates.
Why it matters
P/B, bank capital, and liquidation debates all start here. For a brand-heavy compounder, book is a rounding error; for a lender, it is the franchise minus the marks.
Case
AFS bond marks in 2022 took bank book down without a sale. Held-to-maturity hid the same economic hole until deposit flight forced the mark.
How to read it
Say tangible vs total and what is marked. Liquidation value is another model; book is not that model.
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