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Balance sheet (deeper)

Tangible Book Value

Shareholders' equity minus goodwill and other intangibles — what's left if you ignore non-physical assets.

Part of the Reading Financial Statements course · Lesson 26 of 33
Formula
Tangible Book Value = Total Shareholders' Equity − Goodwill − Other Intangible Assets

What it is

Tangible book value is total shareholders' equity with goodwill and intangible assets stripped out. It estimates the net assets backing each share if you only count items with a clear physical or financial substance. It is sometimes called tangible net worth or tangible common equity.

Why it matters

Goodwill and intangibles can be written down to zero in a bad year, so equity that leans heavily on them is fragile. Tangible book value gives a more conservative floor and is a standard yardstick for banks and acquisition-heavy companies, where reported book value is often inflated by past deals.

How it's calculated

Take total shareholders' equity from the balance sheet, then subtract goodwill and other intangible assets; divide by shares outstanding for per-share tangible book value.

How Quintarthai uses it

The Financials and Statistics tabs on a company page show equity, goodwill, and intangibles so you can compute or sanity-check tangible book value yourself.

Cross-border note. Both US GAAP and IFRS (used by most Canadian issuers) carry goodwill and intangibles separately on the balance sheet, so the calculation is the same across borders. IFRS permits a revaluation model for intangibles, but only where an active market exists (rare in practice), so it seldom affects the figure for typical filers.

FAQ

Why subtract goodwill?
Goodwill is the premium paid above fair value in an acquisition. It has no resale value on its own and is often written off if the deal disappoints, so removing it shows a more durable measure of net assets.
Can tangible book value be negative?
Yes. If a company carries large goodwill and intangibles relative to its equity, subtracting them can push tangible book value below zero, which is common after big debt-funded acquisitions.
Related terms
See Tangible Book Value on a real company
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