Book value is total assets minus total liabilities and is commonly known as net worth.

The book value

is highly dependent on the value of the assets as declared in the audited financial statements,
particularly the balance sheet or the statement of financial position.
The assets are required to be categorized into current and non-current assets. On the other hand,
liabilities is also categorized as current and non-current. In the book value method, the value of the
enterprise is based on the book value of the assets less all non-equity claims against it and is
computed as follows:
Net Book Value of Assets = (Total Assets - Total Liabilities) / No. of Outstanding Shares
Advantage: It provides a more transparent view on firm value and is more verifiable since this is based
in the figures reflected in the financial statements.
Limitation: Only reflects historical value (only based on what is recorded in the accounting books) and
might not reflect the real value of the business now.