What is the book value of equity?

The book value of equity is an accounting measure used to assess the financial health of a company. It is calculated by subtracting the total liabilities from the total assets on a company’s balance sheet. The result is then divided by the number of outstanding shares, which gives investors an indication of how much each share would be worth if a company had to liquidate its assets and pay off all its liabilities (Dhaliwal et al., 2011).