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Calculating Book Value, Market Value, and Levered Value

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How would I proceed in interpreting this info....and what are the results I should expect to find?

Identify Berkshire Hathaway, Inc.'s book value, market value, and levered value according to the M&M model.

www.berkshirehathaway.com

Also available through Yahoo! Finance (Ticker symbol: BRK-A)

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Solution Summary

Identify Berkshire Hathaway, Inc.'s book value, market value, and levered value according to the M&M model.

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Book Value: Book value is the net asset value of the company, calculated by total assets minus intangible assets such as goodwill, patents and liabilities. Basically, it is the total value of the company's assets which a shareholder will receive if it is liquidated. To find the book value of Berkshire Hathaway, you will have to look into its latest Balance Sheet Statements, which can be found on various public sources like Yahoo finance or Edgaronline. Try to use the latest 10K statements. You can use 2004 balance sheet as 2005 is not yet complete.

Please visit the following link of yahoo finance to access the balance sheet for berkshire and take figures of total assets( less the goodwill) and minus total liabilities from it to calculate book value.

http://finance.yahoo.com/q/bs?s=BRK-A&annual

Market Value: It is also known as total market capitalization, that is, the number of shares outstanding ...

Solution provided by:
Sandeep Bardia, MBA
Education
  • BCom, SGTB Khalsa College, University of Delhi
  • MBA, Rochester Institute of Technology
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