Book value indicates what each share of a company is worth according to the books of accounts. It is the value of an asset on a balance sheet. Also, book value means the net asset value of a company, which is calculated by adding all the assets of a firm and subtracting intangible assets and liabilities. From an investor’s point of view, one compares a company’s book value to its market capitalization to determine whether its stock is undervalued or not.