Book Value Formula Finance

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.

Book value formula finance. Using the period end amount which includes short term events may. It is the carrying value of the asset on the balance sheet of the company and is calculated as the original cost of the asset less the accumulated depreciation accumulated amortization accumulated depletion or accumulated impairment. The market to book formula is.

The formula for calculating the book value per share is given as follows. Book value may also be. Below is the book value formula.

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 book value figure is typically viewed in relation to the company s stock value market capitalization and is determined by taking the total value of a company s assets and subtracting any of the liabilities the company still owes. 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.

Net book value is the value of an asset as recorded in the books of accounts of a company. Formula for book value per share. The market to book ratio is calculated by dividing the current closing price of the stock by the most current quarter s book value per share.

The formula for book value per share requires three variables. Book value formula calculates the net asset of the company derived by total of assets minus the total liabilities. Share price net book value per share.

Market to book ratio formula. The company s balance sheet. To find the equity you should subtract the company s liabilities from its assets.