Book Value Per Share Ratio Formula

The information needed to calculate bvps is found on a company s balance sheet.

Book value per share ratio formula. Unlike the pb ratio the mb formula compares values on a company wide basis. Comparing bvps to a stock s market price could help value investors find opportunities. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.

While this is usually found on a balance sheet it is helpful to know how to retrieve this value yourself. 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. Bvps frac total shareholder equity preferred equity total outstanding.

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 total common stockholders equity preferred stock number of common shares. We first subtract the total liabilities from the total assets and divide the difference by the total number of shares outstanding on that date.

In this equation book value per share is calculated as follows. The book value per share is a little more complicated. The price to book value ratio p b formula is also referred to as a market to book ratio and measures the proportion between the market price for a share and the book value per share.

The book value per common share formula below is an accounting measure based on historical transactions. Here s the formula of price to book value price to book value ratio market price per share book value per share. Formula and calculation of p b ratio.

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. 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 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.