Basic Book Value Formula

Depreciation periodic reduction in the value of the asset amortized as per standards.

Basic book value formula. Other cost include impairment cost and related costs. The price to book value ratio p b formula is also referred to as a market to book ratio and measures the proportion between the market price for a share and the book value per share. The calculation of basic shares.

Book value can be positive negative or zero. Mastering the basic excel formulas is critical for beginners to become highly proficient in financial analysis financial analyst job description the financial analyst job description below gives a typical example of all the skills education and experience required to be hired for an analyst job at a bank institution or corporation. The formula for calculating the book value per share is given as follows.

To arrive at the book value simply subtract the depreciation to date from the cost. The book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders. Assets book value formula total value of an asset depreciation other expenses directly related to it.

You can use this book value calculator. Formula to calculate price to book value. The term book value is a company s assets minus its liabilities and is sometimes referred to as stockholder s equity owner s equity shareholder s equity or simply equity.

The formula for calculating book value per share is the total common stockholders equity less the preferred stock divided by the number of common shares of the company. We used the average number of shares outstanding because the closing period amount may skew results if there was a stock issuance or major stock buyouts. Book value of debt is the total amount which the company owes which is recorded in the books of the company.

Formula for book value per share. In the example above the asset s book value after 6 years would be 10 000 6000 or 4000. Therefore the calculation of book value per share will be as follows bvps total common shareholders equity preferred stock number of outstanding common shares 2 93 491 00 cr 592 18 cr.