A firm's common stock equity as it appears on a balance sheet, equal to total assets minus liabilities, preferred stock, and intangible assets such as goodwill. This is how much the firm would have left over in assets if it went out of business immediately. Since firms are generally expected to grow and generate more profits in the future, market capitalization is higher than book value for most firms. Since book value is a more accurate measure of valuation for firms which aren't growing quickly, book value is of more interest to value investors than growth investors.