Book Value, usually the abbreviation BV is used. It is a term that indicates profit achievement in the enterprise in the past and current period which is split between the state (taxes), owners (dividends) and enterprise (reinvestment). It also reflects the owners’ strategic decision (the ratio of profit distribution between consumption and reinvestment).
Calculation:
BV = Equity / Number of issued common shares
Use of the BV in practice: The ratio is mostly used by investors when assessing the company’s activities.
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