|SHAREHOLDER EQUITY and BOOK VALUE|
Shareholder equity is sometimes called net worth. Shareholder equity per share is called Book Value. Sometimes intangible assets are subtracted in the book value calculation, although these days intangibles are so important (eg. goodwill) that this move is difficult to justify. Shareholder equity minus intangibles is also called Tangible net worth.
Shareholder equity = Total assets minus total liabilities
Book Value = Shareholder equity / Outstanding shares
Shareholder equity is used in many performance ratios such as Return on Equity etc. Meanwhile the price to book ratio (price divided by book value) is sometimes used as a criteria for investment.
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