What is the relationship between stock price and net value of stock?



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I am in the middle of the quiz. The question was " If the stock price of a company reduces, which of the following items in the balance sheet is affected.
My answer was current assests.
I feel taht since current asset of the company consisst of the cash, stock etc. If the stock price goes down the net value of stock also goes down & hence the current assets value is affected. Please clarify
Anjali
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Please reply as to why my answer was wrong.
Kanitkar

1 Answer(s)


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Vilas, The stock in your company's current asset is not the company's own stock. It is the stock of the other companies that your company has invested in.

When we refer to your company's stock, we are referring to the shareholders equity or net worth.

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