HOMEPAGE

Tangible Book Value (TBV)

Definition

Tangible Book Value represents the value of a company’s net assets excluding intangible assets such as goodwill, trademarks, and patents.

$$\text{TBV}=\text{Total Assets}-\text{Intangible Assets}-\text{Total Liabilities}$$

Why It Matters

• Shows the liquidation value of a company’s physical and financial assets.
• Useful for analyzing banks, insurers, and asset‑heavy businesses.
• Helps investors evaluate downside protection and balance‑sheet strength.

Interpretation

• Higher TBV: Strong tangible asset backing.
• Lower TBV: Heavy reliance on intangibles or leverage.
• Negative TBV: Liabilities exceed tangible assets — high risk.

Example

Total Assets = $5B Intangible Assets = $1.5B Total Liabilities = $3B

$$\text{TBV}=5-1.5-3=0.5\text{billion}$$

The company has $500 million in tangible net assets.