Comparative valuation analysis is a catch-all model that can be used if you cannot value Nvidia Corp by discounting back its dividends or cash flows. The ratio of Price to Book to Last Dividend Paid for Nvidia Corp is roughly 63.19 . It is considered to be number one stock in last dividend paid category among related companies creating about 0.02 of Last Dividend Paid per Price to Book. And finally, the book value of a company is the total value of the company’s assets that shareholders will receive in case the company gets liquidated.Nvidia Corp is considered to be number one stock in price to book category among related companies. Face value is the value of a company which is listed in its books and share certificate.
In a nutshell, Market value per share is the current value at which the stock is trading in the market. All these three terms are different in each term and one should not get confused among them while studying any company in details. CONCLUSION:īy now, the meaning of face value, market value, and book value should be crystal clear to you. Its utmost important for investors and traders to pay close attention to book value however, to the nature of the company and other assets that may not be well represented in the book value. Book value is primarily important for investors using a investing strategy because it can enable them to find bargain deals on stocks, especially if they suspect that the company is undervalued and/or is poised to grow, and the stocks are going to rise in price. P/B ratio is a highly useful comparison tool while taking an investment decision based on various parameters. When you divide the current price of the share of a company with its book value per share, you get P/B (price to book value) ratio. Thus, book value is calculated using the following two formulas:īook value per share = total assets – total liabilities / total number of shares issued by the companyīook value per share = Equity share capital + reserves and surplus / total number of shares issued by the company It depicts the amount per share the shareholders can get if the company is liquidated and its assets are sold off to pay the liabilities. BOOK VALUE:īook value, in literal terms, means the value of the share in the company’s books. Market cap is used commonly while comparing similar companies because share prices are affected more by corporate actions like bonus, stock split, etc. It is a basic parameter which is widely used in calculations such as market cap with respect to sales. Since the market price of shares changes throughout the day, the market cap of a company also changes accordingly. Market value is mostly referred by the market analysts and investors when they mention the value of a company. Market value per share = total value of the company in the market / total number of shares issued by the company For example, if a stock is trading at a share price of Rs 400, then this is the market value per share of that company. It represents the market capitalization of a publicly traded company. Market value is the value at which the share is traded on the listed stock exchange.
Bond prices are mostly influenced by their face value.Īlso Read- How To Read The Financial Statement Of Any Company MARKET VALUE: It is important to know that when it comes to stocks, face value generally has no relation to market price. It is crystal-clear that understanding face value of shares is important to invest or trade hassle-free in the stock market. Also, for computing the market value, discounts, premiums and returns, etc the value of a share is taken into consideration.
It is generally used for the purpose calculating interest on the shares and bonds. (Source: Avenue supermart IPO details- Chittorgarh)įace value has a key role in a company. And it may trade at a market price of Rs 500. For example, when a company goes public, it can have a face value of Rs 10. Face value is the original cost of the shares as listed on the certificate.įace value is not calculated rather it reflects the face value in the form of shares depending upon the capital that a company wishes to raise from market. Face value is also known as par value which is the legal capital of each share of stock held by an individual. For a second we should understand that what does these terms mean? FACE VALUE:įace value of shares or nominal value, is the value shown on the face of security and the share is actually listed in the stock market. We often come across some terminologies such as Face Value, Book Value and Market Value.