Book value per share

Similar financial terms

Booking Fee
Another term to describe a fee which is payable upfront to either source or reserve funds for a mortgage. Usually applicable for fixed or capped rate mortgages.

Cook the book
A term describing accounting practices that misrepresent the true financial status of a company to achieve a desired result, such as showing higher profits or more consistent reports from one period to another. The practice involves the posting of transactions before or after their true periods, creative accounting procedures, and other practices not acceptable under standard of accounting and auditing practice.

Unmatched book
If the average maturity of a bank's liabilities is less than that of its assets, it is said to be running an unmatched book. The term is commonly used with the Euromarket. Term also refers to the condition when a firm enters into OTC derivatives contracts and chooses to hedge that risk by not making trades in the opposite direction to another financial intermediary. In this case, the firm with an unmatched book hedges its net market risk with futures and options, usually.

Tax books
Set of books kept by a firm's management for the IRS that follows IRS rules. The stockholder's books follow Financial Accounting Standards Board rules.

Stockholder's books
Set of books kept by firm management for its annual report that follows Financial Accounting Standards Board rules. The tax books follow IRS tax rules.

Market-to-Book
Compares a stock's market value to the value of total assets less total liabilities (book value). Determined by dividing current stock price by common stockholder equity per share (book value), adjusted for stock splits. Also called Price/book ratio

Net book value
The current book value of an asset or liability; that is, its original book value net of any accounting adjustments such as depreciation.

Matched book
A bank runs a matched book when the distribution of maturities of its assets and liabilities are equal.

Limit order book
A record of unexecuted limit orders that is maintained by the specialist. These orders are treated equally with other orders in terms of priority of execution.

Book
A banker or trader's positions.

Book cash
A firm's cash balance as reported in its financial statements. Also called ledger cash.

Book profit
The cumulative book income plus any gain or loss on disposition of the assets on termination of the SAT.

Book runner
The managing underwriter for a new issue. The book runner maintains the book of securities sold.

Book value
A company's book value is its total assets minus intangible assets and liabilities, such as debt. A company's book value might be more or less than its market value.

Book-entry securities
The Treasury and federal agencies are moving to a book-entry system in which securities are not represented by engraved pieces of paper but are maintained in computerized records at the Fed in the names of member banks, which in turn keep records of the securities they own as well as those they are holding for customers. In the case of other securities where a book-entry has developed, engraved securities do exist somewhere in quite a few cases. These securities do not move from holder to ho ...

Off-the-books
Cash or barter. Business done without records as a means to avoid taxation.

Principal value
The amount that the issuer of a bond agrees to repay the bondholder at the maturity date. The principal is also referred to redemption value, maturity value, par value or face value.

Back-end value
The amount paid to remaining shareholders in the second stage of a two-tier or partial tender offer.

Going-concern value
The value of a company as a whole over and above the sum of the values of each of its parts; the value of organization learning and reputation.

Terminal value
The value at maturity.

Face value
Alternative name for par value.

Adjusted present value (APV)
The net present value analysis of an asset if financed solely by equity (present value of un-levered cash flows), plus the present value of any financing decisions (levered cash flows). In other words, the various tax shields provided by the deductibility of interest and the benefits of other investment tax credits are calculated separately. This analysis is often used for highly leveraged transactions such as a leverage buy-out.

Value manager
A manager who seeks to buy stocks that are at a discount to their "fair value" and sell them at or in excess of that value. Often a value stock is one with a low price to book value ratio.

Value dating
Refers to when value or credit is given for funds transferred between banks.

Value date
In the market for eurodollar deposits and foreign exchange, value date refers to the delivery date of funds traded. Normally it is on spot transactions two days after a transaction is agreed upon and the future date in the case of a forward foreign exchange trade.

Value additivity principal
Prevails when the value of a whole group of assets exactly equals the sum of the values of the individual assets that make up the group of assets. Stated differently, the principle that the net present value of a set of independent projects is just the sum of the net present values of the individual projects.

Value-at-Risk
A value-at-risk (VAR) model is a procedure for estimating the probability of portfolio losses exceeding some specified proportion based on a statistical analysis of historical market price trends, correlations, and volatilities.

Value-added tax
Value-added tax (VAT) is a method of indirect taxation whereby a tax is levied at each stage of production on the value added at that specific stage.

Utility value
The welfare a given investor assigns to an investment with a particular return and risk.

Time value of money
The idea that a dollar today is worth more than a dollar in the future, because the dollar received today can earn interest up until the time the future dollar is received.

Time value of an option
The portion of an option's premium that is based on the amount of time remaining until the expiration date of the option contract, and that the underlying components that determine the value of the option may change during that time. Time value is generally equal to the difference between the premium and the intrinsic value.

Straight value
Also called investment value, the value of a convertible security without the con-version option.

Standardized value
Also called the normal deviate, the distance of one data point from the mean, divided by the standard deviation of the distribution.

Salvage value
Scrap value of plant and equipment.

Residual value
Usually refers to the value of a lessor's property at the time the lease expires.

Replacement value
Current cost of replacing the firm's assets.

Relative value
The attractiveness measured in terms of risk, liquidity, and return of one instrument relative to another, or for a given instrument, of one maturity relative to another.

Price value of a basis point (PVBP)
Also called the dollar value of a basis point, a measure of the change in the price of the bond if the required yield changes by one basis point.

Present value of growth opportunities (PVGO)
The net present value (NPV) of investments the firm is expected to make in the future.

Present value factor
Factor used to calculate an estimate of the present value of an amount to be received in a future period.

Present value
The amount of cash today that is equivalent in value to a payment, or to a stream of payments, to be received in the future.

Par value
Also called the maturity value or face value, the amount that the issuer agrees to pay at the maturity date.

Original face value
The principal amount of the mortgage as of its issue date.

Net salvage value
The after-tax net cash flow for terminating the project.

Net present value rule
An investment is worth making if it has a positive NPV. Projects with negative NPVs should be rejected.

Net present value of future investments
The present value of the total sum of NPVs expected to result from all of the firm's future investments.

Net present value of growth opportunities
A model valuing a firm in which net present value of new investment opportunities is explicitly examined.

Net present value (NPV)
The present value of the expected future cash flows minus the cost.

Net asset value (NAV)
The value of a fund's investments. For a mutual fund, the net asset value per share usually represents the fund's market price, subject to a possible sales or redemption charge. For a closed end fund, the market price may vary significantly from the net asset value.

Net adjusted present value
The adjusted present value minus the initial cost of an investment.

Market value-weighted index
An index of a group of securities computed by calculating a weighted average of the returns on each security in the index, with the weights proportional to outstanding market value.

Market value ratios
Ratios that relate the market price of the firm's common stock to selected financial statement items.

Market value
(a) The price at which a security is trading and could presumably be purchased or sold. (b) The value investors believe a firm is worth; calculated by multiplying the number of shares outstanding by the current market price of a firm's shares.

Loan value
The amount a policyholder may borrow against a whole life insurance policy at the interest rate specified in the policy.

Liquidation value
Net amount that could be realized by selling the assets of a firm after paying the debt.

Bond value
With respect to convertible bonds, the value the security would have if it were not convertible apart from the conversion option.

Cash-surrender value
An amount the insurance company will pay if the policyholder ends a whole life insurance policy.

Conversion value
Also called parity value, the value of a convertible security if it is converted immediately.

Embedded value
A methodology that reflects future shareholder profits in the life insurance business. Embedded value equals the free surplus plus the value of inforce business. Embedded value is hard to compare with different companies since each company determines its own input parameters, for example the level of target surplus.

Salvage Value
Is the amount remaining after a depreciated useful life. It refers to the residual or recoverable value of a depreciated asset. It should be noted that the gross salvage value may be adjusted by a removal or disposal cost. This adjustment would lower the gross salvage value.

Extrinsic Value
The time value component of an option premium.

Commercial paper
Short-term, unsecured promissory notes issued by corporations with a high credit ratings. Their maturity ranges up to 270 days.

SuperMontage
The SuperMontage is NASDAQ's trading system to aggregate quotes and orders, providing access to more possible trades. Launched in 2002, SuperMontage is a fully integrated order display and execution system, capable of handling an expanded universe of orders. The key features include pre-trade anonymity, the ability to aggregate interest five price levels deep on each side of the market, internalization of orders still available, time stamps of individual orders to preserve position and priority, ...

Scalper
A trader who holds positions for a very short period of time.

Performance Related Pay
Performance Related pay is a remuneration system whereby the employee's pay is based on his or her performance. It is basically a payments by results system that is designed to give incentive to the employee to work harder or more productively. In its simplest form, this may be an annual bonus based on subjective assessment of performance. In many larger organisations this can be more structured, based on a set of pre-agreed objectives or targets. Performance related pay is becoming increasingly ...

Diluted earnings per share
A calculation of earnings per share. Add conversion value or preferred stock and convertible bonds to net profit, then divide the result by the number of outstanding shares of common stock that would exist after full conversion; the result is expressed as a dollar value per share.

Earnings per share
The latest reported net earnings, divided by the number of outstanding shares of common stock; one of the most widely used forms for reporting earnings, also called basic earnings per share and distinguished from diluted earnings per share.

Growth in earnings per share
A ratio comparing current earnings per share to the same ratio in a base year; it is used to track rates of growth for the economy.

Workout period
Realignment period of a temporary misaligned yield relationship that sometimes occurs in fixed income markets.

Annual fund operating expenses
For investment companies, the management fee and "other expenses," including the expenses for maintaining shareholder records, providing shareholders with financial statements, and providing custodial and accounting services. For 12b-1 funds, selling and marketing costs are included.

Annual percentage rate (APR)
The periodic rate times the number of periods in a year. For example, a 5% quarterly return has an APR of 20%.

Annual percentage yield (APY)
The effective, or true, annual rate of return. The APY is the rate actually earned or paid in one year, taking into account the affect of compounding. The APY is calculated by taking one plus the periodic rate and raising it to the number of periods in a year. For example, a 1% per month rate has an APY of 12.68% (1.01^12).

Annualized holding period return
The annual rate of return that when compounded t times, would have given the same t-period holding return as actually occurred from period 1 to period t.

Waiting period
Time during which the SEC studies a firm's registration statement. During this time the firm may distribute a preliminary prospectus.

Underperform
When a security is expected to appreciate at a slower rate than the overall market.

Trading paper
CDs purchased by accounts that are likely to resell them. The term is commonly used in the Euromarket.

T-period holding-period return
The percentage return over the T-year period an investment lasts.

Supermajority
Provision in a company's charter requiring a majority of, say, 80% of shareholders to approve certain changes, such as a merger.

Subperiod return
The return of a portfolio over a shorter period of time than the evaluation period.

Short-run operating activities
Events and decisions concerning the short-term finance of a firm, such as how much inventory to order and whether to offer cash terms or credit terms to customers.

Set of contracts perspective
View of corporation as a set of contracting relationships, among individuals who have conflicting objectives, such as shareholders or managers. The corporation is a legal contrivance that serves as the nexus for the contracting relationships.

Separation property
The property that portfolio choice can be separated into two independent tasks: (a) determination of the optimal risky portfolio, which is a purely technical problem, and (b) the personal choice of the best mix of the risky portfolio and the risk-free asset.

Property rights
Rights of individuals and companies to own and utilize property as they see fit and to receive the stream of income that their property generates.

Preferred equity redemption stock (PERC)
Preferred stock that converts automatically into equity at a stated date. A limit is placed on the value of the shares the investor receives.

Personal trust
An interest in an asset held by a trustee for the benefit of another person.

Personal tax view (of capital structure)
The argument that the difference in personal tax rates between income from debt and income from equity eliminates the disadvantage from the double taxation (corporate and personal) of income from equity.

Perquisites
Personal benefits, including direct benefits, such as the use of a firm car or expense account for personal business, and indirect benefits, such as up-to-date office décor.

Perpetual warrants
Warrants that have no expiration date.

Performance shares
Shares of stock given to managers on the basis of performance as measured by earnings per share and similar criteria. A control device used by shareholders to tie management to the self-interest of shareholders.

Performance measurement
The calculation of the return realized by a money manager over some time interval.

Performance evaluation
The evaluation of a manager's performance which involves, first, determining whether the money manager added value by outperforming the established benchmark (performance measurement) and, second, determining how the money manager achieved the calculated return (performance attribution analysis).

Performance attribution analysis
The decomposition of a money manager's performance results to explain the reasons why those results were achieved. This analysis seeks to answer the following questions: (a) What were the major sources of added value? (b) Was short-term factor timing statistically significant? (c) Was market timing statistically significant? And (d), Was security selection statistically significant?

Perfected first lien
A first lien that is duly recorded with the cognizant governmental body so that the lender will be able to act on it should the borrower default.

Perfectly competitive financial markets
Markets in which no trader has the power to change the price of goods or services. Perfect capital markets are characterized by the following conditions: a) trading is costless, and access to the financial markets is free, b) information about borrowing and lending opportunities is freely available, c) there are many traders, and no single trader can have a significant impact on market prices.

Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital market environment, that shows the irrelevance of dividend policy in a perfect capital market.

Perfect market view (of capital structure)
Analysis of a firm's capital structure decision, which shows the irrelevance of capital structure in a perfect capital market.

Perfect hedge
A financial result in which the profit and loss from the underlying asset and the hedge position are equal.

Perfect competition
An idealized market environment in which every market participant is too small to affect the market price by acting on its own.

Perfect capital market
A market in which there are never any arbitrage opportunities.

Paper gain (loss)
Unrealized capital gain (loss) on securities held in portfolio, based on a comparison of current market price to original cost.

Paper
Money market instruments, commercial paper and other.

Overperform
When a security is expected to appreciate at a rate faster than the overall market.

Operationally efficient market
Also called an internally efficient market, one in which investors can obtain transactions services that reflect the true costs associated with furnishing those services.

Operating risk
The inherent or fundamental risk of a firm, without regard to financial risk. The risk that is created by operating leverage. Also called business risk.

Operating leverage
Fixed operating costs, so-called because they accentuate variations in profits.

Operating lease
Short-term, cancelable lease. A type of lease in which the period of contract is less than the life of the equipment and the lessor pays all maintenance and servicing costs.

Operating profit margin
The ratio of operating margin to net sales.

Operating exposure
Degree to which exchange rate changes, in combination with price changes, will alter a company's future operating cash flows.

Operating cycle
The average time intervening between the acquisition of materials or services and the final cash realization from those acquisitions.

Operating cash flow
Earnings before depreciation minus taxes. It measures the cash generated from operations, not counting capital spending or working capital requirements.

Open-market purchase operation
A systematic program of repurchasing shares of stock in market transactions at current market prices, in competition with other prospective investors.

Open-market operation
Purchase or sale of government securities by the monetary authorities to increase or decrease the domestic money supply.

Neutral period
In the Euromarket, a period over which Eurodollars are sold is said to be neutral if it does not start or end on either a Friday or the day before a holiday.

Net period
The period of time between the end of the discount period and the date payment is due.

Net operating margin
The ratio of net operating income to net sales.

Net operating losses
Losses that a firm can take advantage of to reduce taxes.

Multiperiod immunization
A portfolio strategy in which a portfolio is created that will be capable of satisfying more than one predetermined future liability regardless if interest rates change.

Intellectual Property
This terms refers to all assets of a company that have an intellectual nature to them. They are often referred to as "soft" assets such as trademarks, logos, patents, software, trade secrets, brands, industrial designs, music, colors, designs, etc. They usually have intangible value unlike hard assets such as land, buildings, and equipment.

Hyperinflation
This refers to very rapid, out-of-control inflation. There is no exact definition of what consitutes hyperinflation. In 1922 this occurred in Germany when the country printed banknotes so liberally that consumers had to take bags full of currency to make purchases. Inflation has been over 100% for many countries at various times in their history. Since inflation for stable economies is in the low single-digits, it is generally understood that inflation above 10% would constitute hyperinflation. ...

BARRA's performance analysis (PERFAN)
A method developed by BARRA, a consulting firm in Berkeley, California. It is commonly used by institutional investors applying performance attribution analysis to evaluate their money managers' performances.

Capital market imperfections view
The view that issuing debt is generally valuable but that the firm's optimal choice of capital structure is a dynamic process that involves the other views of capital structure (net corporate/personal tax, agency cost, bankruptcy cost, and pecking order), which result from considerations of asymmetric information, asymmetric taxes, and transaction costs.

Cash flow from operations
A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus non-cash expenses that were deducted in calculating net income.

Cash flow per common share
Cash flow from operations minus preferred stock dividends, divided by the number of common shares outstanding.

Compounding period
The length of the time period (for example, a quarter in the case of quarterly compounding) that elapses before interest compounds.

Credit period
The length of time for which the customer is granted credit.

Basel Committee on Banking Supervision
A committee that meets under the auspices of the Bank for International Settlements in Basel, Switzerland to set bank regulatory standards.

Grace period
The time period stipulated in most loan contracts and insurance policies in which a late payment will not result in default or cancellation.

Foreign Investor in Real Property Tax Act of 1980
Under FIRPTA (Foreign Investor in Real Property Tax Act of 1980), and the Economic Recovery Act of 1981, unless an exemption is granted by the IRS, upon the sale of real property owned by offshore (foreign) persons, the agency, attorney or escrow officer handling the transaction is required to withhold capital gains taxes at the closing of the sale transaction. Unless withheld and submitted to the IRS, the party handling the sale transaction is personally liable for the taxes.

High Net Worth (HNW) Person
An individual with more than $1,000,000 in liquid assets to manage.

Perpetuity
A perpetuity is a stream of payments or a type of annuity that starts payments on a fixed date and such payments continue forever, or perpetually. Often preferred stock which pays a dividend is considered as a form of perpetuity. However, one must assume that the firm does not go bankrupt or is otherwise impeded for making timely payments. The formula for evaluating a perpetuity is relatively straight forward. It is simply the expected income stream divided by a discount factor or market rat ...

Commercial Paper
Short-term promissory notes issued in bearer form by large corporations, with maturities ranging from 5 to 270 days. Since the notes are unsecured, the commercial papers market generally is dominated by large corporations with impeccable credit ratings.

Share
Companies issue shares as a means of raising equity finance and determining ownership. Purchasers of shares pay money into the company's bank account in return for a Share Certificate signifying their ownership of the shares. The shareholders legally own the company and are therefore entitled to a share in its profits. Shares in public limited companies are traded on the Stock Market and as such the value of the shares will fluctuate depending on the demand.

American shares
Securities certificates issued in the U.S. by a transfer agent acting on behalf of the foreign issuer. The certificates represent claims to foreign equities.

Shares
Certificates or book entries representing ownership in a corporation or similar entity.

Shareholders' letter
A section of an annual report where one can find jargon-free discussions by management of successful and failed strategies which provides guidance for the probing of the rest of the report.

Shareholders' equity
This is a company's total assets minus total liabilities. A company's net worth is the same thing. Also referred to as ownership interest in the UK.

Share repurchase
Program by which a corporation buys back its own shares in the open market. It is usually done when shares are undervalued. Since it reduces the number of shares outstanding and thus increases earnings per share, it tends to elevate the market value of the remaining shares held by stockholders.

Preferred shares
Preferred shares give investors a fixed dividend from the company's earnings. And more importantly: preferred shareholders get paid before common shareholders.

Outstanding shares
Shares that are currently owned by investors.

Outstanding share capital
Issued share capital less the par value of shares that are held in the company's treasury.

Management/closely held shares
Percentage of shares held by persons closely related to a company, as defined by the Securities and exchange commission. Part of these percentages often is included in Institutional Holdings -- making the combined total of these percentages over 100. There is overlap as institutions sometimes acquire enough stock to be considered by the SEC to be closely allied to the company.

Goldbrick Shares
A stock with only the surface appearance of quality and worth, that is in fact worth very little.