The net value of a stock is also called the book value of a stock. The net value of each common share that can be allocated to the company's accounting books is the value of the actual assets contained in the stock. It is equal to the net value of the company minus the balance of the total face value of the company's preferred shares in circulation, and then divided by the number of common shares in circulation. The net value of a company is called "shareholders' equity" in accounting.
It is the sum of the company's capital plus various provident funds and retained earnings (accumulated losses and other liabilities). Among them, the capital is the sum of the total par value of preferred shares and common shares, and various provident funds include statutory provident fund, asset provident fund and special provident fund. The above items constitute the equity part of the company's balance sheet, and the sum of the company's equity and liabilities is equal to the company's total capital.
Therefore, shareholders' equity is also equal to the company's assets MINUS liabilities, which is the company's net worth. When the company loses money year after year and the accumulated loss exceeds the original reserve fund, the net value of the company will be less than the capital, and after deducting the denomination of preferred shares, it will be less than the denomination of common shares.