Subsequent accounts of the parent company are set up to include the retained earnings and
assets at book value (subject to certain adjustments) of the acquired company.
Not exact matches
In contrast, when a deal is structured around stock, the
assets on the
books must be amortized
at their
value to the seller, which is likely to be far less than the total sale price.
With this method,
assets are measured
at their gross
book value rather than
at net
book value in order to produce a higher return on equity (ROE).
This ratio can be slightly misleading because
Assets are carried
at book value rather than market
value which might scew this ratio depending on the age of the
Assets.
Trading
at over 2x
book value, the shares of the $ 440 billion total
asset USB are up 2x the S&P 500 over the past year.
It may be pertinent to mention that the
book value of the power plant which is currently estimated
at USD 325 million after five (5) years, with a life cycle of around 15 -20 years, will be handed over to the Government as a debt free
asset which can be used to leverage and raise financing as a collateral or else the Government may choose to sell the operating
asset to any investor who may not like to take any development risk, hence the plant being operational and in its best conditions.
All companies have a
book value, so you take a look
at your equity, your
assets, your liabilities, and everything else and then, you know, an accounting firm says, «well, here's your
book value.»
The price to tangible
book value ratio to some degree overcomes this issue and more closely represents what common shareholders can expect to receive if the firm goes bankrupt and all of its
assets are liquidated
at their
book values.
This is an analysis metric that compares a company's share price with its «
book value» — essentially, its
assets minus its liabilities — and, as you can see, it is now significantly higher than it was
at the peak of the dotcom bubble in early 2000.
Stable
value funds may have $ 90 of
assets at current market
value backing $ 100 of
book value.
The Theory of Investment
Value by John Burr Williams Originally written as a Ph.D. thesis at Harvard in 1937, this book is still considered the authoritative work on how to determine the value of financial as
Value by John Burr Williams Originally written as a Ph.D. thesis
at Harvard in 1937, this
book is still considered the authoritative work on how to determine the
value of financial as
value of financial
assets.
Among these are avoiding companies with too much debt; looking for a margin of safety, such as over - 2.0 current ratio (current
assets dividend by current liabilities); and seeking stocks trading
at low price - earnings ratios and low price - to -
book -
value ratios.
Book value refers to the accounting standard of recording an
asset's
value at its historical cost on the balance sheet.
Second, in their new
book,
Value Investing — From Graham to Buffett and Beyond written by Bruce C.N. Greenwald, Judd Kahn, Paul D. Sonkin and Michael van Biema (Greenwald and van Biema are faculty members
at Columbia Business School), the authors seem to have trouble identifying, and
valuing, net
assets.
Examining only the result of a company's
assets minus its liabilities (its
book value) is akin to looking
at a company as if it was merely a bank account.
If issued
at twice
book value the $ proceeds need only be invested
at half the ROE of the pre-existing
assets in order for the EPS to remain the same.
Keep in mind,
book value for a company is like looking
at my
book value, all
assets and liabilities, which is certainly important, but it ignores my earnings.
The balance sheet is a summary of
assets, liabilities, and net worth (
book value)
at a specific point in time.
If the department store is to be liquidated, merchandise inventories are indeed a current
asset, convertible to cash within 12 months
at prices that conceivably could be close to
book value, although much less than
book value may be realized if the merchandise is disposed of in a Going Out of Business sale.
If you look carefully
at MFC financial before it merged with Terra Nova... MFC spun off from its parent with a lot of
assets that were
valued on the
books for very little.
BBND's tangible
book value at 31 March was $ 142M or $ 2.10 per share (~ 80 % of BBND's
assets are cash and short term investments and it has no debt).
If you strip out the «returns» from its merchant banking (it spun off with
assets with
book value far below actual
value and slowly reported profits when these discrepancies were recognized) and just look
at the free cash flow of its operating businesses, the returns have been ok but nothing phenomenal.
Our net tangible
book value at March 31, 2012 was $ 0.24 per share and was determined by dividing our actual net tangible
book value (total
book value of tangible
assets less total liabilities) on that date, by the number of outstanding shares (1,249,446) on March 31, 2012.
I would avoid the
asset class, unless you buy into the non-traded funds, which price
at book value.
[NB: i) Church House's Argo stake is held by the Deep
Value Investments Fund, managed by Jeroen Bos — if you haven't read it already, I can highly recommend his recent
book «Deep
Value Investing», ii) XXX Capital Management is a well - known European hedge fund, which hasn't publicly disclosed a holding in Argo to date, hence the redaction — Argo management are obviously aware of their shareholding & support, and iii) the letter was based on a GBP 14p share price & a higher GBP / USD rate —
at the current 13.875 p price and exchange rate, Argo now trades
at a 36 % discount to net cash and investments, and a 47 % discount to net tangible
assets.]
The stock is trading
at approximately 10 % under its
book value, but that
book value is likely understated because of years of depreciating its biggest
assets: the power plants themselves.
However, realize that stock prices factor in future earnings, while
book value just looks
at current
assets.
At spinoff, the company had about $ 188 million in
book value (about $ 7.88 per share), most of this cash, plus certain of Myriad Genetics oncology R&D efforts (what I will call the IP
assets).
In your question and link about a Capital Cost Allowance, you are looking
at the
book value of an
asset.
On emergence, the company had a
book value of about $ 38 / share (remember this represents «fresh start accounting
value», an estimate of true
asset value at the time of exit from bankruptcy, not a historical cost number) and about $ 0.9 billion in long - term debt vs. pre-petition debt of $ 4.8 billion
I have a copy of Damodaran's The Dark Side of Valuation:
Valuing Young, Distressed, and Complex Businesses (2nd Edition), weighing in
at 575 pages, as well as his
book Investment Valuation: Tools and Techniques for Determining the
Value of Any
Asset, Second Edition (similar size, with a quarter inch of dust on my shelf.
Look
at all the variables you used when you bought the stock — discounted cash flow, price - to - earnings, price - to - cash - flow, net
asset value, price - to -
book — and use that information to decide what the upside is if the stock rises and what you stand to lose if it drops.
Most importantly, it is selling
at a substantial discount to its
book value and net
asset value.
The bank just works off the unfavorable
assets on its balance sheet and the market returns to its normal valuation of BAC
at 1.6 to 2x
book value.
Thus the gap between
assets at fair
value and liabilities
at book value have significance.
Logistics Director — Duties & Responsibilities Oversee daily operations, logistics, inventory and property
valued at more than $ 100 million Train, direct, and review large staffs ensuring they adhere to proper policies and procedures Determine schedules, workflow, and project estimates resulting in timely and effective operations Set and strictly adhere to departmental budgets and timelines Utilize Property
Book Unit Enhanced (PBUE), Storage Inventory Management System (SIMS), Fleet Management System (FLMS), Force and
Asset Search (FAAST), and International Merchant Purchasing Authorization Card (IMAC) and other inventory management and logistics tools Coordinate shipping and receiving resulting in timely and on budget operations Serve as technical advisor to junior and senior team members Build and strengthen professional relationships with coworkers, supervisors, and partner agencies Study internal literature to become an expert on products and services Investigate internal conflicts, production errors, and other issues and determine remedial measures Create and implement staff development programs enhancing team skill sets Consistently promoted due to excellence in management and dedication to company mission Represent company brand with poise, integrity, and positivity
Because of the vast number of problem loans on their
books, some lenders want appraisers to
value troubled
assets at unreasonably low levels in order to serve their agendas of «dumping» troubled
assets at fire - sale prices.
The properties sold in July, which came from the Centro America Fund, were purchased
at a 10 percent discount to the
assets» previous
book value.
In fact, with a debt to total
assets ratio of approximately 98 percent, virtually any bid General Growth receives in today's environment will be
at a discount to the
book value of its properties, says Suzanne Mulvee, senior real estate economist with Property & Portfolio Research, a Boston - based research firm.
The larger REITs have seen large buying for yield seekers, ETFs and
asset allocators that has driven the valuation of large REITS like Simon Properties (SPG) and Mr. Zell's own Equity Residential Properties (EQR) prices up to 2 times
book value and higher, while many of the smaller ones have languished and trade
at discounts to their
asset value.