The Myth:
A business is always worth at least its book value.

The Reality:
If the business isn’t profitable, or if its assets are illiquid or obsolete, the true value may fall below book. Buyers pay for income potential — not just recorded assets.

Why It Matters:
Using book value as a floor can lead to overvaluation — especially for asset-heavy companies in decline.

Practical Tip:
Test book value against liquidation value, market comps, and income potential before relying on it.