Book Value vs Market Value of Shares the finance storyteller

by adminHanoiHalongTour



What is the difference between book value and market value of shares on the stock market? This video explains the book value and market value concepts, and illustrates book value versus market value using the example of Apple Inc. The distinction between book value and #marketvalue of a stock is basically one of looking back versus looking forward. ️TIMESTAMPS⏱️ 0:00 Introduction 0:23 Book value explained 0:43 Market value explained 1:44 How to calculate book value 2:22 What market value means 2:58 Price-to-book ratio 3:22 What does price- to-book ratio indicate 4:05 Warning sign: low price-to-book ratio (below 1) Book value, or accounting value, is based on a company’s historical financial results, looking back. You use a company’s latest balance sheet to come up with the book value of the equity, you look up the number of shares outstanding (which is usually mentioned in the earnings per share calculation in the income statement), and when you divide the two numbers you get the book value per share. Market value, or economic value, depends on the expectations of investors for the future of the company, looking forward. Do investors see sunshine and blue skies coming up, or clouds and thunderstorms? In order to form an opinion about a company’s future, it is wise to dive into its strategy, technology, and leadership. Do these give you confidence that the company is on the right track? Next step is to try to translate that assessment to numbers: based on the strategy, technology, and leadership, what do you see as the possible revenue, income, and cash flow for the company for the next 10 to 20 years? Last step is to review probability and variability: do you think the projected revenue, income and cash flow are pretty much a “done deal”, so the risk and volatility are low, or is there a wide range of both positive and negative scenarios, so the risk and volatility are high? Want to track the total return on your stock portfolio (share price increase/decrease plus dividends received), then check out the easy-to-use online portfolio tracker called Sharesight: Philip de Vroe (The Finance Storyteller) aims to make strategy, accounting , finance and #investing enjoyable and easier to understand. Learn the business vocabulary to join the conversation with your CEO at your company. Understand how financial statements work in order to make better stock market investment decisions. Philip delivers training in various formats: YouTube videos, classroom sessions, webinars, and business simulations. Connect with me through Linked In! ,

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Book Value vs Market Value of Shares

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Book Value vs Market Value of Shares
the finance storyteller
आप यहां बहुत सारी उपयोगी जानकारी देख सकते हैं।: यहाँ और देखें
आप यहां बहुत सारी उपयोगी जानकारी देख सकते हैं।: यहाँ और देखें

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30 comments

The Finance Storyteller 02/03/2022 - 5:00 Chiều

Enjoyed this video? Then please subscribe to my channel, and watch the video on market capitalization: https://youtu.be/k-Rp32j0uj8 Want to track the total return on your stock portfolio (share price increase/decrease plus dividends received), then check out the easy-to-use online portfolio tracker called Sharesight: https://www.sharesight.com/thefinancestoryteller/

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dearjem 02/03/2022 - 5:00 Chiều

How important is the book value and all those ratios if you're investing just for capital growth and not so much for income (dividend payouts etc)? Supposedly your to-be-realised capital gain is just selling the stock after its market value has risen- which is pretty much influenced by market sentiment?

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Sushil Agarwal 02/03/2022 - 5:00 Chiều

Take

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Muhammad Rehan Azhar 02/03/2022 - 5:00 Chiều

What about nominal/par value? Whats that?

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rikey pointing 02/03/2022 - 5:00 Chiều

So if net asset of A company per share is 25 and market value is 150 and B company’s net asset per share is 25 and market value is 20 so which share should I buy?

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erez levi 02/03/2022 - 5:00 Chiều

As usual another excellent explanation ..

At the end of the video you said that you do not use this figure as one of your main ones.

May I ask which ones?

Thanks in advance

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Anish Thapa 02/03/2022 - 5:00 Chiều

book value or eps which to choose?

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Anonymous A 02/03/2022 - 5:00 Chiều

Thank you! I have a test in 40 minutes and you explained it so simply!

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MICS ASMR 02/03/2022 - 5:00 Chiều

Can I ask if the Shareholder represents the market value?

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yagenta13 02/03/2022 - 5:00 Chiều

Great video, thank you

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DeanRendar84 02/03/2022 - 5:00 Chiều

if the boardroom guys make decisions going forward to even sell their pooled shares based on whats recorded and proven like debt and remaining inventory i think thats the best indicator of a companies health compared to a shouting bell guy on basic cable tv news stock speculation which just serves as sponsored p.r. announcements reacting all crazy to market prices which spring back to normal like 3 days later

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Dolev Mazker 02/03/2022 - 5:00 Chiều

well explained man, i enjoyed this video

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dinesh kumar 02/03/2022 - 5:00 Chiều

Very well.. how to calculate market value and face value? You have any video this

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Azlan Shah A Shafiuddin 02/03/2022 - 5:00 Chiều

Is Book Value the same as Enterprise Value?

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K Marquez 02/03/2022 - 5:00 Chiều

Great video. Learn a lot

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Momenttom 02/03/2022 - 5:00 Chiều

Lekker Nederlands accentje

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Soujanya Tuladhar 02/03/2022 - 5:00 Chiều

Book value weight is more relevant or market value?

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nelly svabska 02/03/2022 - 5:00 Chiều

Where did you get outstanding shares from please?

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bigjro010 02/03/2022 - 5:00 Chiều

Thanks for the video.
Just to confirm… can these terms be replaced with “Carrying Amount” and “Fair Value”?

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Jacob Sober 02/03/2022 - 5:00 Chiều

You sound like Nikki Lauda in the movie rush. Great video btw.

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Madiyar Rakhmanov 02/03/2022 - 5:00 Chiều

Good morning dear author of the video. I am a novice in the field of investment. I am a foreigner. Thank you very much for your very well explained video with visual examples. Difficult notions are explained in articulate English language that even a foreigner may understand. I am looking forward to watch your videos. Have a nice day.

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maverick mcsherry 02/03/2022 - 5:00 Chiều

Thank you for video

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Henrique Bernardes 02/03/2022 - 5:00 Chiều

Português de Portugal?

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Janelle Ann Elaugos 02/03/2022 - 5:00 Chiều

is it necessary to record the cost or the fair market value?

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Lukas 02/03/2022 - 5:00 Chiều

Damn. Thanks for taking your time by making a PP, using clear examples and explaining the topic very well!!! +1 sub and like

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onee 02/03/2022 - 5:00 Chiều

Are you Dutch? 😛

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Kingwest1337 02/03/2022 - 5:00 Chiều

Time will tell !

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Francisco Vinueza 02/03/2022 - 5:00 Chiều

Great video. I love how easy you explain things.

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anantha ramayya 02/03/2022 - 5:00 Chiều

time will tell

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Firas Taher 02/03/2022 - 5:00 Chiều

What does it mean when a company sells their own shares lower than the market value? Will the price of a share increase or decrease?

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