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Strategies & Market Trends : Joe Copia's daytrades/investments and thoughts -- Ignore unavailable to you. Want to Upgrade?

To: Joe Copia who wrote (4360)	6/4/1998 1:31:00 PM
From: P.E. Allen	Respond to of 25711

\| Next \| Respond \| Silicon Investor Home Page To: TokyoMex (59 ) From: P.E. Allen Thursday, Jun 4 1998 9:02AM ET Reply # of 82 By book value here is meant the value of the security on the books of the issuing corporation, not cost or other value appearing on the holder's records. Ordinarily the book value of a stock is measured by capital stock outstanding (plus premium or special capital surplus and less discount and preoperating losses) plus appropriated and unappropriated surplus (from operation and special gains) or less accumulated losses or deficits (resulting from regular operation or special circumstances) and balances representing capital returned to stockholders. Book value per share is total book value divided by the number of shares outstanding. When two or more issues are outstanding the apportionment of total book value may be a troublesom question. In general the contracts of preference issues state the amount that the holder of each share is entitled to in case of involuntary liquidation before the common stock can share in the assets and this amount (multiplied by the number of preference shares) must be subtracted from the total book value before the book value of the common can be ascertained. Book value to the issuing company is not in general a satisfactory basis for the valuation of stock on the books of the holder. Cost to the original investor, it is true, may approximate or equal initial book value. From date of origin on, however, the two figures usuall diverge markedly because of the accumulation of surplus (or deficit). Like wise market prices often bear little relation to book value. Some market factor are highly immediate in character and all operate through the attitudes of buyers and sellers of securities. The basis for book value, on the other hand is found in the methods of recording and the valuation methods employed by the corporation. The following describes the approach ordinarily used by accountants in computing book value per share: What would the stockholders receive on a per-share basis if the company were liquidated without gains, losses or expenses; in other words, if the cash avaiable for distribution, after the payment of all liabilities, were exactly equal to the stockholders' equity shown by the balance sheet? If there is only one class of stock, the book value per share is computed by dividing the total stockholders' equity (or book value of all of the stock) by the number of shares outstanding. You need a set of the financials, etc. to go through the actual numbers.