Book Value Per Share Is Negative

Since preferred stockholders have a higher claim on assets and earnings than.

Book value per share is negative. Since the firm s limited liability structure means. Now on to your concern. And the negative equity.

So negative equity alone has no meaning. If book value is negative where a company s liabilities exceed its assets this is known as a balance sheet insolvency. I buy stocks all the time most stocks i buy in fact that have positive tangible equity in excess of my purchase price that is they trade below tangible book value.

Because book value per share only considers the book value it fails to incorporate other intangible factors that may increase the market value of a company s shares even upon liquidation.