What Is Book Value? Book value is an accounting measure of the net value of a company. It’s used to calculate the valuation of a company based on its assets and liabilities.

Unlike market value, which reflects the value of a company as an ongoing concern, liquidation value is typically lower due to the discounted prices assets may fetch in a quick sale.

To show you how to calculate the net asset value of a hedge fund, we'll look at the financial statements of Pershing Square Holdings, a publicly traded "hedge fund" that's managed by Bill Ackman.