Book Value Per Share Example

For example if the bvps is 20 per share and the market value of the same common share is 30 per share the investor can find out the ratio of price to book value as price book value 30 20 1 5.

Book value per share example. Total book value divided by the number of shares. The revised bvps will be as follows. At the same time we use book value in the case of roe formula when we calculate the roe per share.

Shareholders equity preferred shares. One of the main ways of increasing the book value per share is to buy back common stocks from shareholders. The formulas and examples for calculating book value per share with and without preferred stock are given below.

Book value per share example. The book value per share may be used by some investors to determine the equity in a company relative to the market value of the company which is the price of its stock. Stockholders equity preferred stock average shares outstanding book value per share.

Total outstanding shares total number of shares issued shares as treasury stock. It will reduce the current shares outstanding to 2 5 million 3 000 000 500 000. Indian stock market the book value is per share value i e.

Using the previous example assume that the company repurchases 500 000 common stocks from its shareholders. Book value is the total amount of company s physical assets excluding patents goodwill minus liabilities. As a common shareholder she wants to know the minimum equity that she would have a claim on.

Book value per share is determined by dividing common shareholders equity by total number of outstanding shares. Mostly the book value is calculated for common stock only. Example of book value per share.