Book Value Per Share Balance Sheet

A guide for investors smartasset via yahoo finance 5 months ago.

Book value per share balance sheet. Conceptually book value per share is similar to net worth meaning it is assets minus debt and may be looked at as though what would occur if operations were to cease. It is the amount that shareholders would receive if the company dissolves realizes cash equal to the book value of its assets and pays liabilities at their book value. When calculating the book value per share of a company we base the calculation on the common stockholders equity stockholders equity stockholders equity also known as shareholders equity is an account on a company s balance sheet that consists of share capital plus and the preferred stock should be excluded from the value of equity.

The information needed to calculate bvps is found on a company s balance sheet. Calculate the firm s stock price book value from the balance sheet. Book value is the net value of a firm s assets found on its balance sheet and it is roughly equal to the total amount all shareholders would get if they liquidated the company.

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. For example if the firm s total common stockholder s equity is 6 3 million and the average number of common shares outstanding is 100 000 then the stock price s book value for the firm would be 63. The price to book ratio p b is one way to evaluate a stock s value something that may be important if you re looking.

Book value per share of common stock is the amount of money each share would receive based on the balance sheet if the company is liquidated today. Book value per share. Book value per share bvps is a measure of value of a company s common share based on book value of the shareholders equity of the company.

Understanding book value per share. For example enterprise value would look at the market value of the company s equity plus its debt whereas book value per share only looks at the equity on the balance sheet. Comparing bvps to a stock s market price could help value investors find opportunities.

Stock buyback can reduce bvps if market price at which stock is repurchased is higher than the current book value per share. Return per share stable return on equity cost of equity book value of equity per.