 We have seen that the book value of a company and the market value of a company Tell us two different stories about the same company. So it is therefore important to compare the two So that we can have a so that we can have a Comprehensive or a big picture in order to come up with the right or better decision-making when we are intending to invest In that company. So when we compare the market and the book value What people do is they consider both Values in order to make better decisions. So now we are going to discuss three scenarios These can be the three possibilities when you compare the book value with the market value. The scenario one can be Which we assume that the book value is greater than the market value. What does this mean? That the accounts show that any company's financial position is stronger as compared to the market Its performance or its growth is forced. So when there is an investor in the market, he is seeing that This particular company is not growing in the future or is not performing very well financially So by doing this, its market value will decrease. That is, in the stock market terms, its share prices are decreasing They are decreasing due to the decrease in demand. But the financial position that the financial statements show, if we look at it Then we get to see its value more. So if there is such a situation for any company Then it means that the investor has lost his confidence in that company. And he is understanding that there is a problem in this company So it may be that he is wrong. It may be that he is right. We don't know. It will be materialized over time But there may be, they are forcing that there is a problem with the business Or if an important case has been lost, the investor has gone a little behind Or it may be that, as I said, when we investigate the behavior of the investor in the financial market So there are several types of abnormal activities that we call financial anomaly So it may be that due to some herd behavior or due to some other sentiment change The investor has gone a little behind. And as soon as the investor starts reducing the share demand, the price will fall below The book value of the investor is still strong. So in such a situation, the value investors who understand that The company's financial position is good, which is represented by the book value And in the market, the price of the shares is still low. So this is an opportunity for us Because the book value overall is good, so in the future, the performance of the market is going to be better Because of having a strong financial position according to the book value of that company So they think that the share of companies like this should be invested So there are several types of investors who we call value investors They think that it is important to invest in such companies But it is important to note that it is not necessary Because if they are understanding this, then it will really be like this It may be a possibility that the market prices are going down, so they continue to fall And it may have an effect on your overall financial position Or it may be that the value investors were considering that Because of abnormal activity, the share demand is going down But because the firm is doing good, so it may be a possibility that it will perform well in the future Sometimes we observe, contrary to this, that there can be a second type of situation Which we are calling scenario 2, to explain the concept That the market value of your firm is better than its book value So it may be that you will get a company like this Whose overall performance according to the stock market is good But when you look at its financial accounts or financial statements Then you get to see a dismal picture This can also be the case When the financial investor sitting in the stock market He thinks that any company is going to perform well in the future Or they are going to grow and there are a lot of chances of expanding In such cases, he prefers to invest in the shares of that particular company He advises And by doing this, the market value goes up Without a doubt, his book value is not so good So this particular situation is again a possibility And we see such situations in the stock market That the investor is attaching his optimism with a company Who is not sitting in such a good position Then we have, when we analyze investors What kind of investors like to invest in these kinds of companies So contrary to the previous scenario We said that the value investor invests in these kinds of companies Where the book value is more and the market value is better But in this case, in scenario 2 We see that the growth investors like to invest their money In these kinds of stocks or to buy the shares of these companies Where the market price is high and the book value is low Comparatively as compared to the market value Then we have got a third scenario In which there is a possibility that you saw the book value Of any company and you compared it with its market value And they both are dying to see you almost the same This means that the market, the investor in the stock market Has no strong reason to compel or force it That this particular company's situation is going to be much better Or its situation is going to fall a lot So overall there is a, the two values stand at par And neither is it going to be very good or bad In this kind of a situation The company's book and market value shows you at par So these could be the three possibilities we observe And this is how we can analyze the behavior of an investor Who considers both the market value and the book value To make the decisions regarding investment in a certain company