Book Value Per Share Expression
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.
Book value per share expression. Book value of equity per share abbreviated as bvps is a company s available equity to common shareholders apportioned by the number of outstanding common shares. In other words this measures a company s total assets minus its total liabilities on a per share basis. Updated november 17 2020.
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 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. In that sense book value and book value per share reflect a minimum value of a company s equity.
Book value is based on the amount the company has invested in its assets but not their current market value. Book value per share bvps is a ratio used to compare a firm s common shareholder s equity to the number of shares outstanding. In the case that the firm dissolves it is the amount the shareholders will receive.
Book value per share is a fairly conservative way to measure a stock s value. The book value per share bvps is a ratio that weighs stockholders total equity against the number of shares outstanding. 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.
What is the book value per share bvps. 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. Book value per share total common stockholders equity preferred stock number of common shares.
The book value of a company stripped to basics is the value of the company the stockholders will own if the firm s.