# Asset book value formula

May 29, 2019 · Book value is an asset's original cost, less any accumulated depreciation and impairment charges that have been subsequently incurred. The book values of assets are routinely compared to market values as part of various financial analyses. Nov 25, 2019 · A conservative approach to evaluating a company's worth is to calculate tangible book value, also called net tangible assets. The formula is the company's assets minus liabilities, intangible assets and the value of preferred stock. The result tells you what the tangible worth equals after liabilities are subtracted from tangible assets. The book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders. The term "book value" is a company's assets minus its liabilities and is sometimes referred to as stockholder's equity, owner's equity, shareholder's equity, or simply equity. The way I thought of calculating it gives the same average book value provided in the reading. Net income only occurs at the end of each year, but you still start with book value at t=0, so that value needs to be included in calculation. Average book value then becomes (200 + 160 + 120 + 80 + 40 + 0)/6 = 600/6 = 100