Book Value Per Equity Share Formula

Book value per share total common stockholders equity preferred stock number of common shares.

Book value per equity share formula. Book value per share total equity preferred shares average of outstanding ordinary shares from the equation above this metric only measures the value of ordinary shares. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. Here s the formula of price to book value price to book value ratio market price per share book value per share.

Book value indicates the difference between the total assets and the total liabilities and when the formula for book value per share is to divide this book value by the number of common shares. The formula for book value per share book value of equity total number of outstanding shares taking above example of apple inc we can calculate the book value per share as follows. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes.

The price to book value ratio p b formula is also referred to as a market to book ratio and measures the proportion between the market price for a share and the book value per share. 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 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.

If the value of bvps exceeds the market value per share the. It is calculated by multiplying a company s share price by its number of shares outstanding whereas book value or shareholders equity is simply the difference between a company s assets and liabilities. 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.

This figure represents the minimum value of a company s. The formula for book value per share requires three variables. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes.

The equity value of a company is not the same as its book value. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. Total equity preferred equity and total outstanding shares.