According to financial statements, assets minus liabilities are the equity of a company. The equity divided by the number of shares outstanding is the book value. Book value is a simplest type of intrinsic value of the company and is more accounting measure rather than economic. The book value can be compared with the current market price which gives Price/book ratio, P/B: Shareholders’ equity: $100 millions Total shares outstanding, diluted: 10 millions Market price: $50 P/B = $50/10 = 5 Book value, as well as other approaches such as liquidation value, benchmark valuation, replacement value and q-Theory, is poor estimates because many assets such as goodwill can be overestimated or not included on the balance sheet. However, there is net current asset value, NCAV, derived by subtracting all the liabilities from the current assets and calculated on a per share basis. This method can eliminate the disadvantage of the latter balance sheet methods by setting all the noncurrent assets to zero. This can be effective when screening stocks but the method itself oversimplifies the notion of value.