tangible common equity definition

tangible common equity

Computed by deducting intangible assets, goodwill, and preferred equity costs from the firm's normal book value (BV). This statistic gives a representation of the value of a company going through liquidation, by subtracting assets that would not be worth anything during the liquidation process. The calculation is similar to tangible book value, but tangible common equity said to be more representative because it also subtracts preferred equity, and is considered the best valuation of this scenario.

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