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DEVTECH FINANCE
STOCK MARKET BASICS
FACE VALUE,
BOOK VALUE &
MARKET VALUE
FACE
VALUE
• Face Value is the original value of
share issued mentioned in the share
certificate at beginning when co. gets
listed on stock exchange.
• Face value does not change and stay
constant unless stock is split.
• For example, during the IPO of XYZ
Co., the management decided the face
value per share to be Rs 10. to raise an
equity capital of 1 Cr. which means
total of 10 lakh shares issued.
BOOK
VALUE
• Book Value is the Net worth of the Co.
• Net worth = Total assets – Total liabilities.
• Book value per Share equals :
Net Worth
Total No. of O/s Shares
• A company's book value is the amount that
the shareholders would receive after all
assets were liquidated and liabilities paid
off.
• For example – Networth of XYZ Co. as in
balance sheet is Rs. 10 Cr. and No. of
Outstanding Share is 10 Lakhs so, Book
Value per Share will be 10 Cr. divided by
10 Lakh shares equals Rs. 100 per Share.
MARKET
VALUE
• Market Value is the current trading price
of the stock quoted on exchange.
• Market value is calculated by multiplying
the total number of shares outstanding
with the current market price of a share.
• Book value and market value are both
helpful in calculating whether a stock is
fairly valued, overvalued or undervalued.
• When the market value is less than book
value, the market doesn't believe the
company is worth the value on its books.
• A higher market value than book value
means the market is assigning a high
value to the company due to future
growth prospects.
THANK YOU FOR WATCHING
DEVTECH
FINANCE

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Face Value, Book Value & Market Value

  • 1. DEVTECH FINANCE STOCK MARKET BASICS FACE VALUE, BOOK VALUE & MARKET VALUE
  • 2. FACE VALUE • Face Value is the original value of share issued mentioned in the share certificate at beginning when co. gets listed on stock exchange. • Face value does not change and stay constant unless stock is split. • For example, during the IPO of XYZ Co., the management decided the face value per share to be Rs 10. to raise an equity capital of 1 Cr. which means total of 10 lakh shares issued.
  • 3. BOOK VALUE • Book Value is the Net worth of the Co. • Net worth = Total assets – Total liabilities. • Book value per Share equals : Net Worth Total No. of O/s Shares • A company's book value is the amount that the shareholders would receive after all assets were liquidated and liabilities paid off. • For example – Networth of XYZ Co. as in balance sheet is Rs. 10 Cr. and No. of Outstanding Share is 10 Lakhs so, Book Value per Share will be 10 Cr. divided by 10 Lakh shares equals Rs. 100 per Share.
  • 4. MARKET VALUE • Market Value is the current trading price of the stock quoted on exchange. • Market value is calculated by multiplying the total number of shares outstanding with the current market price of a share. • Book value and market value are both helpful in calculating whether a stock is fairly valued, overvalued or undervalued. • When the market value is less than book value, the market doesn't believe the company is worth the value on its books. • A higher market value than book value means the market is assigning a high value to the company due to future growth prospects.
  • 5. THANK YOU FOR WATCHING DEVTECH FINANCE