Book Value Per Share Calculation
Net income on a per share basis is referred to as eps or earnings per share.
Book value per share calculation. Book value per share bvps takes the ratio of a firm s common equity divided by its number of shares outstanding. That is the amount that ordinary shareholders will receive when the company is liquidated. Shareholders equity preferred shares.
The calculation of its book value per share is. For example suppose you have 1 000 shares of a company and the book value per share is rp5. The higher the book value the more the share is worth.
As shown at the top of this page book value per share is expressing stockholder s equity on a per share basis. 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. If the value of bvps exceeds the market value per share the.
Book value per share. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis. 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. Total equity preferred equity and total outstanding shares. 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.
To find the equity you should subtract the company s liabilities from its assets. Book value per common share or simply book value per share bvps is a method to calculate the per share book value of a company based on common shareholders equity in the company. The formula for book value per share requires three variables.