Forum Archive Index - June 2003

[cab105 <CAB105@student.canterbury.ac.nz>]

Wow,

never expected so many responses to what I initally thought was a fairly
simple question. I guess now, that I probably didn't word the question quite
right, but I can fix that all now.

By, 'Book Value', I was refering to the term used in ASB Securities, Research
Page -> Company Historical Financials -> Per Share Statistics. I've just
called ASB Sec to clarify their meaning, and was informed that clicking on the
word would give me a definition (oops):

>ASB Securities Glossary
>Book Value per Share (net assets)
>Represents what the shareholder owns of the company, after netting total
>liabilities from total assets. It includes both tangible and intangible
>assets. It is measured by dividing shareholders equity by the number of
shares >outstanding, as of the year end balance date.
>© Aspect Financial Pty. Ltd.

I already had some idea of the different possible meanings of 'book value',
but was actually more interested in why some companies listed on the NZX trade
so much higher than their 'book values'. For example,

THL   BV/Share(6/02) = 1.8
THL   Share Price   ~= 1.0

TEL   BV/Share(6/02) = 0.7
TEL   Share Price   ~= 5.1

can anybody explain the VAST differences we can see in the above examples?

thanks again,

Carl



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