The accounting value of a company’s assets minus its liabilities is called book value.
Book value is derived from a company’s balance sheet. In the simplest form, shareholders’ equity equals total assets minus total liabilities. If book value is expressed per share, the company’s equity is divided by the relevant number of shares, subject to accounting and share-count details.
Book value is based on accounting records rather than the live market price of the company’s shares. Assets may be recorded at historical cost, depreciated value, or other accounting measures, so book value can differ substantially from what the assets might sell for today. Intangible assets and goodwill can also affect reported equity.
Market capitalization measures the market’s current value of outstanding shares, so it is not the same as book value. Investors sometimes compare the two using the price-to-book ratio, but that comparison is more informative for some industries than for companies whose value mainly comes from brands, software, or other intangible assets.