A measure of the physical worth of a company, which does not include any value derived from intangible assets such as copyrights, patents and intellectual property. Tangible net worth is calculated by taking a firm's total assets and subtracting the value of all liabilities and the value of all intangible assets.
Investopedia Says:
In terms of a consumer, tangible net worth is the sum of all your tangible assets (cash, home, cars, etc) less any liabilities you may have. In the financial markets, tangible net worth represents the amount of physical assets a company has net of its liabilities. Thus, it represents the supposed liquidation proceeds a company would fetch if its operations were to cease immediately and the firm was sold off.
Related Links:
The P/B ratio can be an easy way to determine a company's value, but it isn't magic! Value By The Book
Intangible assets don't appear on balance sheets, but they're crucial to judging a company's value. The Hidden Value Of Intangibles
Asset performance shows how what a company owes and owns affects its investment quality. Testing Balance Sheet Strength
