Book Value Per Share Is Determined By

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.

Book value per share is determined by. Book value per share conclusion the book value per share is the minimum cash value of a company and its equity for common shareholders. Book value is typically shown per share determined by dividing all shareholder equity by the number of common stock shares that are outstanding. The market price per share is simply the current stock price that the company is being traded at on the open market.

C dividing liabilities by the number of shares of stock outstanding. The book value per share is a little more complicated. The formula for book value per share requires three variables.

Book value per share is determined by. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. The price to book ratio formula is calculated by dividing the market price per share by book value per share.

The information needed to calculate bvps is found on a company s balance sheet. What is the book value per share bvps. Book value per share assets liabilities number of shares.

For example a company that is currently trading for 20 but has a book value of 10 is selling at twice its equity. 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 first part is to find out the equity available to the common stockholders.

To find the equity you should subtract the company s liabilities from its assets. Importance of book value book value is considered important in terms of valuation because it represents a fair and accurate picture of a company s worth. B deducting liabilities from assets and dividing the remainder by the number of shares of stock outstanding.