Book value of equity

The difference between the total assets and total liabilities of a firm.  The more net income that is earned and retained, the greater is the book value of equity. Because management’s decisions directly influence a company’s net income, they also directly influence its book value of equity.

The book value of equity can be seen as a reflection of a firm’s past and present performance

Compare: Market value of equity

See also: Price-to-book ratio

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