 The book value of a company is determined based upon the values given in the financial statements or the books of a company, whereas the market value of a company is given by its standing or position according to the stock market. So both these concepts have their own significance. Both of them play an important role when we have to analyze or make a financial decision or when we have to decide whether or not we need to invest in a certain company or not. So both the book value and market value play an important role. Both of these concepts are important, but along with them there are some limitations or some bad aspects. Both of these concepts are important, but along with them there are some limitations or some bad aspects. They tell us some things, but they do not explain the complete picture. So it is important for us to understand the limitations of both of these concepts. Both of these concepts are important, but along with them there are some limitations or some bad aspects. So when we look at the book value, as we have already discussed and seen and understood, the book value is the value of a company according to the accounts or the books of that company. So when we look at the market price, you get to see different pictures there. And when we compare both of them, the book value is often seen along with the market value that they represent a company, but the book value and market value are not at the same value. Both are showing different aspects or different values. What is the reason behind it? The reason behind it is that when we determine the book value or calculate it, we do not account for all types of assets of the firm, all types of liabilities. For example, any company has intangible assets. For example, they have employees who work very hard to enhance their employees' quality and productivity. So when you calculate the financial statements and the book value, then the high quality of the employees or the highly productive of them is not inscribed in it. So you cannot see the financial statements or the book value as to how high quality or high level of productivity of the employees are present. So similarly, if a company has placed itself in a very good way in the market and has always manufactured the goods of good quality and followed the best standards, and has made things at a good price for many years, then it has made a good will. So when we consider the financial statements or the book value, then this particular aspect which we call good will in the business language is not accounted for. Therefore, we cannot see intangibles like this in the book value. Therefore, you may come up with a wrong impression or an incomplete picture or an incomplete impression. So this is the limitation of the book value. Similarly, if you look at the intangible assets or good will or the highly productive labour force which has been prepared over a long period of time, they have motivated them, they have ensured job retention, they have given incentives and you cannot account for all these things. Similarly, in your balance sheet, you have shown assets or liabilities or you have shown assets, you have shown them on the original acquisition cost. So over a period of time, it is possible that you have bought a 1 crore package, a machine, but after a year or two years, a highly advanced type of machine came into the market because of which the 1 crore package that you bought a year ago was obsolete or out of fashion or its usage was not good. But in your books, it is 1 crore package. If you have put 10% depreciation on it, then next year its cost according to the balance sheet, according to your total asset including that machine, it will show the value of 1 crore minus 10% of depreciation. But if you sell it in the market, then since it is of obsolete technology, it may sell in a few thousand rupees instead of 1 crore. But your balance sheet is showing you the total asset of 1 crore or 1 crore minus 10% of 1 crore after a year. But the actual value is not like that. So this is another type of limitation which we come across when we account for the book value. So it is important that when you consider the book value, then you should also analyze the market value. Apart from these two different limitations, we have many other limitations of the book value. For example, if you have taken a loan or you had to pay an outstanding amount, then you have repaid it. Because of that, your overall financial position of the company has been greatly damaged. You have to pay a lot of money and you have to pay a lot of money and you have to pay a lot of money. That is another drawback or problem of using the book value. The next important aspect which is considered as another very important limitation of book value is that when we are using this book valuation, the real value of a company is that when we are using this book valuation, the real value of a company is that the real value of a company and in that book value, you sometimes get to see discrepancy. Because when you do not account for the actual market value of assets, then it is possible that you should account for the actual situation of the company bankruptcy. But when you only look at the financial position of the books and the assets, then you may get to see a fancy or rosy picture. So these are all the limitations associated with the book value. Coming to the market value, there are also some limitations. For example, when we accounted for the market capitalization, when we saw in the stock market movements that the share price of a particular company is that much, you can accordingly account for the value of it. So it is possible that there was a certain talk or some abnormal activity in the market that the investor is hopeful for this particular company and they invested in it. We use a concept in investment analysis in which we say that there is this herding effect that someone has told you that I have forced a certain company to prosper and grow in the future. So I have invested a lot of money in it or I have bought a lot of shares of it. So he is a good person. You can see that all the people start following him and you all start buying the shares of that company because of which the demand increases and the price escalates and goes up. This doesn't mean that the overall financial position has become very good. Sometimes because of these elements or because of abnormality, which we call anomaly, because of this anomaly, the market value may give you a wrong impression or a wrong picture. So this can be a limitation. Similarly, what people do to invest is that they account for large capitalization stocks and see their movements. But generally, we see that there is an up-and-down situation and accordingly, they lower their investment. So from there also, they may come up with a wrong decision that there is a 3-5% movement. They are considering that this is a normal movement but it might be problematic in the long run. So sometimes, like I said, there are many different anomalies or abnormal activities that can be in the stock market because of which any stock over-buy or over-sells. And due to over-buy and over-sell, the market price actually goes up or down with a normal market price. It can be because of any problem with the company, with the company, with a company, or with a company, or any sort of change in the structure of the Board of Governors. Due to this, people have said that something is going to go wrong and it might be a strong company but due to this particular information, people have started selling shares that there is going to be a problem here. So this may cause chaos in the market and all the people will start selling it and prices will go down. So here, sometimes, if we only look at the market price, because the market is representing the changes of the stock market, the values of the stock market, it is considered to be very volatile, very fluctuating. So it may give you lead to some wrong decisions and that is also that is a limitation of the market price. So when we look at the two sides together, both the book value and the market values have some good things and some bad things linked up with each other in order to have a better decision making, it is important to consider both. Not only one type of price of the firm or a company.