Sample Thesis Paper

The book value of a share is defined as the total value of the assets held by a company divided by the number of outstanding shares (Levinson, 2006). The use of the term book value is expected to indicate that the value is that reflected by the books of the company involved. The book value of assets is usually accounted for on the basis of the accounting standards used. In most cases the value of the assets is based on the historical cost. Historical costs are the cost that assets are first acquired at (Ahmed et al. 2000).

It should be therefore appreciated that the book value can differ from one company to another due to the accounting standards used even if the fundamental nature of the assets is the same. In the establishment of the book value the accounting standards used should be evaluated to avoid making wrong comparisons. The number of shares used in the calculation of the book value is usually the shares outstanding at any given time or at the time of asset measurement. There exist complications in the measurement of outstanding shares. This is because some shares are issues as options and other securities issue by companies may also have convertibility clauses. The number should therefore be carefully calculated to take care of all changes within the period of calculation.

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