Taj, do you have a second to help me with my reading of Western G&Es annual report? Ive come across several unfamiliar terms, and I want to make sure that Im interpreting the data and managements comments correctly.
For example, one of the footnotes to the financial statements uses the book value of Western G&Es shares, and then in another place, it uses Market Value Added. Ive never encountered those terms before. Do you know what theyre talking about?
TAJ: Yes, I do Lets see if we can make these terms make sense by talking through their meaning and their significance to investors.
The term book value has several uses. It can refer to a single asset or the company as a whole. When referring to an individual asset, such as a piece of equipment, book value refers to the assetsmarket value or replacement cost adjusted for any accumulated depreciation or amortization expense. Thenet value, or difference between these two values, is called the assets book value.
In contrast, when the term refers to the entire company, it means the total value of the companysshareholders equity as reported in the firmsbalance sheet
