Book Value Of Equity Equation
Book value total common shareholders equity preferred stock number of outstanding common shares.
Book value of equity equation. For healthy companies equity value far exceeds book value as the market value of the company s shares appreciates over the years. For example in apple s 1q report released february 1 2018 the company reported total assets of 406 794 billion and liabilities of 266 595 billion. Book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes.
Book value of equity also known as shareholder s equity is a firm s common equity that represents the amount available for distribution to shareholders. The book value of equity is equal to total assetsminus total liabilities preferred stocks and intangible assets. Total equity preferred equity and total outstanding shares.
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. Book value us 375 32 billion us 241 27 billion us 134 05 billion. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.
The book value per share is the minimum cash value of a company and its equity for common shareholders. You can find these figures on the balance sheet. What does book value of equity mean.
This figure represents the minimum value of a company s. Further book value per share bvps can be computed based upon the equity of the common shareholders in the company. For the purpose of analysis the book value of equity is further divided by a total number of shares to make book value per share.
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. Using the accounting equation the book value of equity formula can be stated as follows. How to calculate book value.