Book Value Calculation Formula

The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.

Book value calculation formula. The result tells you what the tangible worth equals after liabilities are subtracted from tangible assets. The image above represents book value. Net income on a per share basis is referred to as eps or earnings per share.

As shown at the top of this page book value per share is expressing stockholder s equity on a per share basis. Book value may also be. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis.

To arrive at the book value simply subtract the depreciation to date from the cost. In the example above the asset s book value after 6 years would be 10 000 6000 or 4000. The formula is the company s assets minus liabilities intangible assets and the value of preferred stock.

The formula for calculating book value. You can use this book value calculator. 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.

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. When compared to the current market value per share the book value per share can provide information on how a company s stock is valued. 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.

If the value of bvps exceeds the market value per share the. Book value per share will be bvps 495 61 book value calculator. B p p s t n where.