finance: Financial analysis of companies & book value
This is a useful site to learn about financial analysis of companies and how to determine their book value. Book values are useful for evaluating insurance companies, who generally have recommended share price/book values between 1.25 to 1.75. Companies with prices/book value lower than 1.25 represent a good buy while those above 2 may be over-priced.
Book Value 
1. The value at which an asset is carried on a balance sheet. In other words, the cost of an asset minus accumulated depreciation.
2. The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.
Book value is the accounting value of a firm. It has two main uses:
1) It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated.
2) By being compared to the company's market value, the book value can indicate whether a stock is under or over-priced.
In the U.K., Book Value is known as "Net Asset Value."
Value by the Book
- The P/B ratio can be an easy way to determine a company's value, but it isn't magic!
Introduction to Fundamental Analysis - Here's an easy-to-understand tutorial on the techniques of analyzing a company's financial statements, including the annual and quarterly reports, the auditor's report, and much more.
Advanced Financial Statement Analysis - Learn what it means to do your homework before investing in a company. Get a deeper understanding of the structure of financial statements and what they tell you about a company's performance and reporting practices.
In Position - Check out this overview of how to determine and analyze a company's financial position
1. The value at which an asset is carried on a balance sheet. In other words, the cost of an asset minus accumulated depreciation.2. The net asset value of a company, calculated by total assets minus intangible assets (patents, goodwill) and liabilities.
Book value is the accounting value of a firm. It has two main uses:
1) It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated.
2) By being compared to the company's market value, the book value can indicate whether a stock is under or over-priced.
In the U.K., Book Value is known as "Net Asset Value."
Value by the Book
- The P/B ratio can be an easy way to determine a company's value, but it isn't magic! Introduction to Fundamental Analysis
- Here's an easy-to-understand tutorial on the techniques of analyzing a company's financial statements, including the annual and quarterly reports, the auditor's report, and much more.Advanced Financial Statement Analysis
- Learn what it means to do your homework before investing in a company. Get a deeper understanding of the structure of financial statements and what they tell you about a company's performance and reporting practices.In Position
- Check out this overview of how to determine and analyze a company's financial position
posted by granddaddy @ 3:20 PM
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