Tangible book value.

In plain English

Tangible book value starts with shareholders' equity and subtracts goodwill and other intangible assets such as patents, licenses, and brand value carried over from past acquisitions. What is left is the accounting value of the physical and financial assets after liabilities. Analysts strip out intangibles because those are the line items most likely to be written down when a deal disappoints. The measure shows up most in bank and insurer analysis, where assets are largely financial and the tangible number sits closer to what a wind-down might produce. It is still an accounting figure, not a market price.

01Why it matters

When a company writes down goodwill, reported equity can fall hard in one quarter, and tangible book value is the version of net worth that never counted those intangibles in the first place.

02The math, step by step

A company reports $8 billion of shareholders' equity, $3 billion of goodwill, and $500 million of other intangibles. $8 billion minus $3.5 billion leaves $4.5 billion of tangible book value. With 500 million shares outstanding, that is $9 per share.

Illustrative example. The amounts here are hypothetical, chosen to show how the math works, not real quoted rates or figures.

03What this is NOT

04Receipts

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