DEFINITION of 'Above Water'

1. Refers to the condition of a company's asset when its actual value is higher than the book value used in its financials.

2. Financially referring to a person staying out of economic trouble or a company remaining financially viable.

BREAKING DOWN 'Above Water'

1. Generally, the book value of an asset listed in a company's balance sheet cannot be adjusted according to Generally Accepted Accounting Principles (GAAP). Should the asset appreciate, its market value would be "above water". A company with above water assets tends to attract value investors. This is because of the hidden value that most investors won't discover if they don't look beyond the financials. For example, if a company purchased a piece of land for $100,000 and the company later discovered an oil reserve on the property, the market value of the land would increase and be above water, because the book value would remain at $100,000.

2. Used in the context of "keeping their head above water" symbolizing the ability to stay alive. For example, company XYZ kept its head above water with an increase in profit even though its revenue dropped.

RELATED TERMS
  1. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
  2. Water ETF

    An exchange-traded fund that invests in companies operating in ...
  3. Liquidation Value

    The total worth of a company's physical assets when it goes out ...
  4. Produced Water

    Waste water generated during the production of oil and natural ...
  5. Market Value

    The price an asset would fetch in the marketplace. Market value ...
  6. Adjusted Book Value

    A measure of a company's valuation after liabilities, including ...
Related Articles
  1. Investing

    Market Value Versus Book Value

    Understanding the difference between book value and market value is a simple yet fundamentally critical component to analyze a company for investment.
  2. Investing

    The Difference Between Book and Market Value

    Book value is the price paid for an asset. It never changes as long as the asset is owned. Market value is the current price at which the asset can sell.
  3. Investing

    Book Value: How Reliable Is It For Investors?

    In theory, a low P/B ratio means you have a cushion against poor performance. In practice, it is much less certain.
  4. Investing

    Water: The Ultimate Commodity

    Opportunities to invest in this scarce resource are flowing freely - dive in!
  5. Investing

    The Economic Effects of Water Shortages

    Raising water prices to dampen demand is a necessary approach to solving the world's water shortage.
  6. Investing

    Using The Price-To-Book Ratio To Evaluate Companies

    The P/B ratio can be an easy way to determine a company's value, but it isn't magic!
  7. Investing

    Company Clone Cost Reveals True Value

    Find out how calculating a reproduction cost for a company can beat out the dividend discount model.
  8. Investing

    Risks to Consider When Investing in Water

    Investing in water should be a lock. But water is volatile and could see as many risks as potential rewards.
  9. Investing

    In Focus: Water Scarcity

    After a discussion, sponsored by CDP, we share the importance of water disclosure as it relates to businesses operating amid increasing water scarcity.
  10. Investing

    Looking for Cost-Effective Ways to Save Water?

    There are lots of things you can do to save water at home while reducing your ecological footprint at the same time. Here are five simple ways to do it.
RELATED FAQS
  1. What does it mean to be "above water"?

    The term "above water" is used to describe any situation in which the ending or current value of a subject is higher than ... Read Answer >>
  2. What is the difference between book value and market value

    Learn the differences between book value and market value, and see how investors use each type to determine if a company ... Read Answer >>
  3. What is the difference between book value and carrying value

    Dig deeper into the definitions of carrying value and book value, and learn to differentiate between their various financial ... Read Answer >>
  4. What's the difference between book and market value?

    Book value is the price paid for a particular asset. This price never changes so long as you own the asset. On the other ... Read Answer >>
  5. What is the difference between a company's book value per share and its intrinsic ...

    Book value and intrinsic value are two ways to measure the value of a company.In simple terms, book value is based on the ... Read Answer >>
  6. What does it mean if a share's market value is significantly higher than its book ...

    Learn how investors and analysts compare the market value of stock shares to the book value per common share; discover what ... Read Answer >>
Hot Definitions
  1. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
  2. Magna Cum Laude

    An academic level of distinction used by educational institutions to signify an academic degree which was received "with ...
  3. Cover Letter

    A written document submitted with a job application explaining the applicant's credentials and interest in the open position. ...
  4. 403(b) Plan

    A retirement plan for certain employees of public schools, tax-exempt organizations and certain ministers. Generally, retirement ...
  5. Master Of Business Administration - MBA

    A graduate degree achieved at a university or college that provides theoretical and practical training to help graduates ...
  6. Liquidity Event

    An event that allows initial investors in a company to cash out some or all of their ownership shares and is considered an ...
Trading Center