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Explanation: Book Value, also known as Equity Capital or Shareholder’s Equity, represents the amount of assets that would be left for shareholders if all the company’s liabilities were paid off. It is calculated by subtracting the company’s total liabilities from its total assets. Book Value is a measure of a company’s net worth from the perspective of its shareholders.
Example: As of FY23, TCS has Equity Capital of 90,424 crore. This figure represents the total value of the company’s shareholders’ equity, which is the residual interest in the assets of the company after deducting its liabilities. In other words, if TCS were to liquidate its assets and pay off all its debts, the remaining amount would be distributed among its shareholders according to their ownership stake. The Equity Capital reflects the book value of the company and serves as a key indicator of its financial health and value to shareholders.
You can view the Equity Capital for any company on Radar in the Balance Sheet section.