Value investing in the context of "Book value"

Corporate finance is an area of finance that deals with the sources of funding, and the capital structure of businesses, the actions that managers take to increase the value of the firm to the shareholders, and the tools and analysis used to allocate financial resources. The primary goal of corporate finance is to maximize or increase shareholder value.

Correspondingly, corporate finance comprises two main sub-disciplines. Capital budgeting is concerned with the setting of criteria about which value-adding projects should receive investment funding, and whether to finance that investment with equity or debt capital. Working capital management is the management of the company's monetary funds that deal with the short-term operating balance of current assets and current liabilities; the focus here is on managing cash, inventories, and short-term borrowing and lending (such as the terms on credit extended to customers).

A stock fund, or equity fund, is a fund that invests in stocks, also called equity securities. Stock funds can be contrasted with bond funds and money funds. Fund assets are typically mainly in stock, with some amount of cash, which is generally quite small, as opposed to bonds, notes, or other securities. This may be a mutual fund or exchange-traded fund. The objective of an equity fund is long-term growth through capital gains, although historically dividends have also been an important source of total return. Specific equity funds may focus on a certain sector of the market or may be geared toward a certain level of risk.

Stock funds can be distinguished by several properties. Funds may have a specific style, for example, value or growth. Funds may invest in solely the securities from one country, or from many countries. Funds may focus on some size of company, that is, small-cap, large-cap, et cetera. Funds which involve some component of stock picking are said to be actively managed, whereas index funds try as well as possible to mirror specific stock market indices.

Warren Edward Buffett (/ˈbʌfɪt/ BUFF-it; born August 30, 1930) is an American investor and philanthropist who is the chairman and CEO of the conglomerate Berkshire Hathaway. As a result of his success, Buffett is one of the best-known investors in America. According to Forbes, as of May 2025, Buffett's estimated net worth stood at US$160.2 billion, making him the fifth-richest individual in the world.

Buffett was born in Omaha, Nebraska. The son of U.S. congressman and businessman Howard Buffett, he developed an interest in business and investing during his youth. He entered the Wharton School of the University of Pennsylvania in 1947 before graduating from the University of Nebraska in Lincoln at 20. He went on to graduate from Columbia Business School, where he molded his investment philosophy around the concept of value investing pioneered by Benjamin Graham. He attended New York Institute of Finance to focus on his economics background and soon pursued a business career.