Book value is a financial metric used to determine the value of a company based on its assets. It is the value that shareholders would receive if the company was liquidated, and it is calculated by subtracting the companys total liabilities from its total assets. Book value is also recorded as shareholders equity. The book value of a stock is theoretically the amount of money that would be paid to shareholders if the company was liquidated and paid off all of its liabilities. Book value is used by investors to gain an objective estimate of a companys worth, and it is often compared to the companys market value. When the market value is greater than the book value, the stock market is assigning a higher value to the company due to the earnings power of the companys assets. However, book value has some limitations, as it does not consider the future at all and does not fully account for intangible assets such as patents, intellectual property, brand value, and goodwill.