Book Value Calculating Formula

The next step is to calculate the book value of debt by employing the above formula book value of debt long term debt notes payable current portion of long term debt usd 200 000 usd 0 usd 10 000 usd 210 000.

Book value calculating formula. Book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes examples of book value of equity calculations with excel template example 1. Book value refers to the total amount a company would be worth if it liquidated its assets and paid back all its liabilities. Alternatively book value can be calculated as the sum total of the overall shareholder equity of the company.

Formula for book value per share. The image above represents book value. Net income on a per share basis is referred to as eps or earnings per share.

Using the period end amount which includes short term events may. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis. This number is determined by dividing the company s total amount of stockholders equity by the number of outstanding shares of common stock.

To compute for book value four essential parameters are needed and these parameters are present amount or worth p salvage value s total estimated life of the asset n and number of years of the asset t. So we can see that the debt for xyz corporation is usd 210 000 which would be different from the market value of. Formula to calculate book value.

It can also represent the value of a particular asset on the company s balance sheet after taking accumulated depreciation into account. 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. You can also determine the book value per share once you know the book value and shares outstanding.

The formula for calculating book value. 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. To calculate the book value of a company subtract the dollar value of the company s preferred stock from its shareholders equity.