Book Value Per Share Investopedia
Book value of equity per share effectively indicates a firm s net asset value.
Book value per share investopedia. The book value per share is calculated using historical costs but the market value per share is a forward looking metric that takes into account a company s earning power in the future. With increases in a company s estimated profitability expected growth and safety of its business the market value per share grows higher. Book value per share can be used to generate a measure of comprehensive earnings when the opening and closing values are reconciled.
Since you bought only 100 shares of wmt its total value will be equal to 100 times its market value per share. 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 information needed to calculate bvps is found on a company s balance sheet.
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. Bookvaluepershare beginning of year dividends shareissuepremium comprehensive eps bookvaluepershare end of year. Market value displays the current market value per share.
Apple stock closed on june 29 2018 at 185 11 per share. If you want to compare companies you can convert to book value per share which is simply the book value divided by the number of outstanding shares. Whereas book value per share is complicated.
About 4 8 billion shares were outstanding at the time so the book value per share was about 23 96 per share. Book value per share bvps takes the ratio of a firm s common equity divided by its number of shares outstanding. Total value reports the current total dollar value of your holdings.
Other components of investing a company s book value and its book value per share are just two small components of an overall investment calculation and strategy. Current stock of the company which company is being trading in the open market is called market price per share. Book value displays the original cost per share of your purchase.