Reading the accounts
Tangible book value
Book value with goodwill and other intangibles removed.
How it works
Stripping out intangibles gives a more conservative figure, closer to what could plausibly be realised in a wind-up.
It matters most for companies that have grown by acquisition, where goodwill can be a large share of stated book value and is the first thing written down when things go wrong.
Related terms
- Book valueWhat the balance sheet says shareholders own: total assets minus total liabilities.
- GoodwillThe premium paid over the fair value of a business’s identifiable assets when acquiring it.
- Intangible assetsNon-physical assets with value: patents, trademarks, software, licences and customer relationships.
- Price-to-bookMarket value divided by the accounting value of the company’s net assets.
More in Reading the accounts
- Working capital
- Share-based compensation
- Writedown
- Runway
- Accounts receivable
- Revenue
- Accrual accounting
- Return on invested capital
All 51 Reading the accounts terms · The full glossary, 433 terms
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.