trading fact # 2

Book value of a share

value of each share is book value. the value of each share for the company is book value.

In easy example if a company would stop working due to some reason and want to give all the share back to their share holder, there is a specific value of each share. Company will pay that amount to those share holder. That amount is book value.

Sometime book value can’t image company’s dedication. It only shows the company with products those can feel and touch by somebody. Company needs money for buying land, machinery equipment, other raw materials. and get their product ready out of their assets. these type of companies’ can be judged by their book value. If a company has book value more than that of share price, can be a better pick for investing.

Sametime, IT companies can’t be judged from the book value and the share price.

Banks can be judged after book value.

BOOK VALUE is a good parameter for investing your money. but keep other parameters in mind before investing.