Book Value Of Stock Formula
Book value may also be.
Book value of stock 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. The book value per share is the minimum cash value of a company and its equity for common shareholders. Roe is net income divided by stockholder s equity.
Book value total common shareholders equity preferred stock number of outstanding common shares. To find the equity you should subtract the company s liabilities from its assets. The book value per common share formula below is an accounting measure based on historical transactions.
The formula states that the numerator part is what the firm receives by the issuance of common equity and that figure increases or decreases depending upon the company is making profit or loss and then finally it decreases by issuing dividend and preference stock. If the value of bvps exceeds the market value per share the. As shown at the top of this page book value per share is expressing stockholder s equity on a per share basis.
Total equity preferred equity and total outstanding shares. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis. Bvps frac total shareholder equity preferred equity total outstanding.
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. 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.