Adjusted Book Value
Barron's Finance & Investment Dictionary:
Top
Adjusted Book Value
book value adjusted for market value on a balance sheet.
| Adjustable Rate Preferred Stock (ARPS), Adjustable Rate Mortgage (ARM) | |
| Adjusted Balance Method, Adjusted Basis |
Related Videos:
Top
Adjusted Book Value
Investopedia Financial Dictionary:
Top
Adjusted Book Value
A measure of a company's valuation after liabilities, including off-balance sheet liabilities, and assets are adjusted to reflect true fair market value. The potential downside of using an adjusted book value is that a business could be worth more than its stated assets and/or liabilities because it fails to value intangible assets, account for discounts or factor in contingent liabilities. It is not often accepted as an accurate picture of a profitable company's operating value, however it can be a way of capturing potential equity available in a firm.
Investopedia Says:
There are literally dozens of methods an investor can use to assign value or price to a business. Deciding which form of valuation method to use involves several factors such as the firm type and availability of information.
The adjusted book value method of valuation is most often used to assign value to distressed companies facing potential liquidation or companies that hold tangible assets such as property or securities. Analysts may use adjusted book value to determine a bottom line price for a company’s value when anticipating bankruptcy or sale due to financial distress.
Related Links:
Learn about this popular stock market valuation model and how accurate it has been over the years. The Fed Model And Stock Valuation: What It Does And Does Not Tell Us
Learn how to evaluate the legitimacy of target prices and why investors should trust these over ratings. Target Prices: The Key To Sound Investing
The answer to this question is directly related to the importance of information in the marketplace. What Is The Impact Of Research On Stock Prices?
This method of valuing a company can make a company look like a bargain when it is not. Relative Valuation: Don't Get Trapped
Find out why funds from operations is a superior measure of REIT performance. How To Assess A Real Estate Investment Trust (REIT)
Make an informed decision about your investments with these easy equations. Analyze Investments Quickly With Ratios
Learn how companies decide how to spend their cash. Looking Deeper Into Capital Allocation
Find out a company's worth if it were sold in pieces - it may be more than you think. Use Breakup Value To Find Undervalued Companies
Calculate whether the market is paying too much for a particular stock. DCF Valuation: The Stock Market Sanity Check
Learn how to put one of the top equity analysis tools to work for you. Peer Comparison Uncovers Undervalued Stocks
Find out how calculating a reproduction cost for a company can beat out the dividend discount model. Company Clone Cost Reveals True Value
Learn how to filter out the noise of the market place in order to find a solid way of determing a company's value. Equity Valuation In Good Times And Bad
In theory, a low P/B ratio means you have a cushion against poor performance. In practice, it is much less certain. Book Value: Theory Vs. Reality
Post a question - any question - to the WikiAnswers community:
Copyrights:
Barron's Finance & Investment Dictionary
Dictionary of Finance and Investment Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.
Read more
