tangible book value

Definition

A company's book value after stripping out intangible assets like goodwill and patents—basically what's left if you only count things you can drop on your foot. It's the pessimist's version of book value that assumes intangibles are worthless.

Example Usage

The tech company traded at 15x book value but only 2x tangible book value, revealing that 87% of its balance sheet was intangible hope.

Origin

Financial analysis metric distinguishing physical assets from accounting artifacts

Fun Fact

Banks are often valued on tangible book value since most of their assets are already financial claims rather than physical property, making intangibles extra suspect.

Source: Equity valuation and financial analysis metrics

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top-down analysis

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