Book Value Of Common Equity 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 of common equity formula. You can also use information on the balance sheet to compute the book value per common share. Common stockholder s equity or owner s equity can be found on the balance sheet for the company. To find the equity you should subtract the company s liabilities from its assets.

Divide the result by the number of common shares outstanding. Bvps frac total shareholder equity preferred equity total outstanding. The book value of equity is equal to total assets minus total liabilities preferred stocks and intangible assets.

The formula for book value per share book value of equity total number of outstanding shares. The book value per common share formula below is an accounting measure based on historical transactions. Book value per share represents equity of the firm on per share basis.

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 per share is the minimum cash value of a company and its equity for common shareholders. 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.

In the case of apple 5 126 201 000 shares results in a book value per common share of 27 35. The formula for book value per share requires three variables. This means if the company dissolves the shareholders will receive an amount per share as per book value per share.

What does book value of equity mean. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes.