Book Value Per Share Formula Investopedia

The book value per share is considered to be the total equity for common stockholders which can be found on a company s balance sheet. Book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes examples of book value of equity calculations with excel template example 1. The formula for price to book value is the stock price per share divided by the book value per share.

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Total assets total liabilities number of shares outstanding.

Book value per share formula investopedia. 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. Book value per share bvps takes the ratio of a firm s common equity divided by its number of shares outstanding. Market value per share is obtained by simply looking at the.

Whereas book value per share is complicated. Current stock of the company which company is being trading in the open market is called market price per share. In other words this measures a company s total assets minus its total liabilities on a per share basis.

The stock price per share can be found as the amount listed as such through the secondary stock market. 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. In this equation book value per share is calculated as follows.

A lower price per book value provides a higher margin of safety. 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. The book value per share bvps is a ratio that weighs stockholders total equity against the number of shares outstanding.

Price to book ratio formula can be calculated by dividing the market price per share by the book value per share. Price to book ratio market price per share book value per share. 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.

It is possible to get the price per book value by dividing the market price of a company s shares by its book value per share.