Book Value Per Share Is The Ratio Of

Comparing bvps to a stock s market price could help value investors find opportunities.

Book value per share is the ratio of. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. The book value of a company stripped to basics is the value of the company the stockholders will own if the firm s. 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 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. 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. The information needed to calculate bvps is found on a company s balance sheet.

We first subtract the total liabilities from the total assets and divide the difference by the total number of shares outstanding on that date. Unlike the pb ratio the mb formula compares values on a company wide basis. This figure represents the minimum value of a company s.

Book value per share is a ratio that compares the net asset value of a company minus preferred equity to the total number of common shares available on the market. 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.

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 book value per share bvps is a measure of value of a company s common share based on book value of the shareholders equity of the company. Many investors rephrase this equation to form the book to market ratio formula by dividing the total book value of the firm by the total market value of the company.

The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. What is the definition of book value per shares. Book value per share is a fairly conservative way to measure a stock s value.