Value

What is 'Value'

The monetary, material or assessed worth of an asset, good or service. In accounting, value describes what something is worth in terms of something else. For example, the value of a loaf of bread might be $3; the $3 for the loaf of bread would represent the generally accepted worth of the bread.


In economics, value describes the merit of the benefits of ownership. The benefits of ownership include utility, the pleasure or satisfaction gained by consumption of a particular good or service; and power, the ability of a good or service to be exchanged for other goods, services or money.

BREAKING DOWN 'Value'

Value is used to quantify the worth of something, and different types of value can be applied to explain various situations. For example, the value of a company can be described in terms of its intrinsic value, book value, actual cash value or market value.


Value can be perceived, as in the way consumers perceive the ability of a good or service to meet their needs and their willingness to pay for the good or service.


The value of an asset, good or service can change over time. For example, the price of a security fluctuates.


Value can also relate to how people feel about something, describing how something is regarded and its importance to the individual. For example, a memento may have very little monetary value but have significant sentimental value.

RELATED TERMS
  1. Relative Value

    A method of determining an asset's value that takes into account ...
  2. Value Investing

    The strategy of selecting stocks that trade for less than their ...
  3. Economic Value

    The worth of a good or service as determined by people's preferences ...
  4. Intrinsic Value

    Intrinsic value is the actual value of a company or an asset ...
  5. Adjusted Net Worth

    A method for valuing an insurance company using capital values, ...
  6. Carrying Value

    An accounting measure of value, where the value of an asset or ...
Related Articles
  1. Fundamental Analysis

    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. Options & Futures

    Stock-Picking Strategies: Value Investing

    Value investing is one of the best known stock-picking methods. In the 1930s, Benjamin Graham and David Dodd, finance professors at Columbia University, laid out what many consider to be the ...
  3. Fundamental Analysis

    What's Fair Value?

    Fair value has three different meanings depending on the context.
  4. Markets

    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.
  5. Options & Futures

    Understanding Net Present Value

    Learn how this value is used to determine the worth of a project.
  6. Professionals

    Values Of Common Stock

    A common stock’s market value is determined by supply and demand and may or may not have any real relationship to what the shares are actually worth. The market value of common stock is ...
  7. Investing Basics

    Investment Value Vs. Fair Market Value: How They Differ

    Learn about the differences between an asset's investment value and its fair market value, including why many think fair market value is unrealistic.
  8. Professionals

    Net Present Value (NPV)

    FINRA/NASAA Series 66 Section 1 - Net Present Value. This section discusses the concept of Net Present Value and its calculation.
  9. Value Definitions and Applications

    Defining Value Investors are concerned with the value of their investment. They all want to make sure that the product they buy or sell is worth the value (price) they pay or receive. Intrinsic ...
  10. Equity Valuation: Its Applications and Processes

    The Objectives of This Section are for the Candidate to: define valuation and intrinsic value, and explain sources of perceived mispricing; explain the going concern assumption, and contrast ...
RELATED FAQS
  1. Is the nominal value of a security ever also the real value?

    Learn more about nominal values and real values. Find out how these market values change and if they may ever converge for ... Read Answer >>
  2. How can you calculate the substitution effect in Excel?

    Learn more about the substitution effect and how it may be illustrated in Excel. Find out how businesses may use the substitution ... Read Answer >>
  3. 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 >>
  4. What is the difference between economic value and market value?

    Learn about the differences between economic value and market value. Discover how they serve different purposes for businesses ... 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 is the difference between intrinsic value and current market value?

    Discover the differences between intrinsic and market values, what makes the former difficult to determine and how investor ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center