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. Markets

    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

    What's Fair Value?

    Fair value has three different meanings depending on the context.
  3. Investing

    Understanding Net Present Value

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

    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.
  7. Investing

    The Difference Between Enterprise Value and Equity Value

    Enterprise value calculates a business’s current value, while equity value offers a snapshot of that business’s current and potential future value.
  8. Investing

    What Is The Value In Value Investing?

    Value investing has its advantages, but it also has significant drawbacks. We look at the pros and cons.
  9. Investing

    Intrinsic Value

    Learn more about this way of valuing a company or an asset based on an underlying perception of its true value.
  10. Investing

    What Is The Intrinsic Value Of A Stock?

    Intrinsic value reduces the subjective perception of a stock's value by analyzing its fundamentals.
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. European Union - EU

    A group of European countries that participates in the world economy as one economic unit and operates under one official ...
  2. Sell-Off

    The rapid selling of securities, such as stocks, bonds and commodities. The increase in supply leads to a decline in the ...
  3. Brazil, Russia, India And China - BRIC

    An acronym for the economies of Brazil, Russia, India and China combined. It has been speculated that by 2050 these four ...
  4. Brexit

    The Brexit, an abbreviation of "British exit" that mirrors the term Grexit, refers to the possibility of Britain's withdrawal ...
  5. Underweight

    1. A situation where a portfolio does not hold a sufficient amount of a particular security when compared to the security's ...
  6. Russell 3000 Index

    A market capitalization weighted equity index maintained by the Russell Investment Group that seeks to be a benchmark of ...
Trading Center