Book value and 澳洲幸运5开奖号码历史查询:intrinsic value are two ways to measure the value of a company. There are a number of differences between them, but essentially book value is a ಞmeasure of the present, while intrinsic value takes into account estimates into the future.

What Is Book Value?

Book value is based on the value of total assets less the value of total 澳洲幸运5开奖号码历史查询:liabilities — it attempts to measure tꦏhe net assets a company has built up until the present time. In theory, this is the amount that the shareholders would receive if the company were to be completely liquidated.

For example, if a company has $23.2 billion in assets and $19.3 billion in liabilities, the book value of the company would be the difference, $3.9 billion. To express this number in terms of book value per share, simply take the book value and divide it by the number of 澳洲幸运5开奖号码历史查询:outstanding shares. If a given company is currently trading below its book value, it is often considered to be 澳洲幸运5开奖号码历史查询:undervalued.

There are, however, several problems with the use of book value as a measure of value. For example, it would be unlikely that the value the company would receive in 澳洲幸运5开奖号码历史查询:liquidation would be equal to the book value per share. Nevertheless, it can still be used as a useful 澳洲幸运5开奖号码历史查询:benchmark to estimate 𓂃how much a profitable company's stock might drop if the market turns sourܫ on it.

What Is Intrinsic Value?

Intrinsic value is a measure of value based on the future earnings a company is expected to generate for its investors — it attempts to measure the total net assets a company is expected to build in the future. It is considered the true value of the company from an investment standpoint and is calculated by taking the 澳洲幸运5开奖号码历史查询:present value of the earnings (attributable to investors) that a company is expected to generate in the future, along with the f🍌uture sale value of the company.

The idea behind this measure is that the purchase of a stock entitles the owner to his or her share of the company's future earnings. If all of the future earnings are accurately known along with the final sale price, the company's true value can be calculated.

For example, if we assume that a company will be around for one year and generate $1,000 before being sold for $10,000, we can find the intrinsic value of the company. At the end of the year we will have received $11,000. If our 澳洲幸运5开奖号码历史查询:required rate of return is 10 percent, then the present value today of the future earnings and sale price is $10,000. If we were to pay more than $10,000 for the company, our required 澳洲幸运5开奖号码历史查询:rate of return would not be met.