Calculate Book Value Per Common Share
The formula for book value per share requires three variables.
Calculate book value per common share. Book value per share stock holders equity preferred stock total outstanding shares related articles. 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. Calculate book value per share from the following stockholders equity section of a company.
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. If the value of bvps exceeds the market value per share the. To find the equity you should subtract the company s liabilities from its assets.
Total equity preferred equity and total outstanding shares. After such modification we get the following widely used formula to calculate book value per share. Formula of book value per common share.
The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. Common stock is the equity capital at the par value of the shares and the additional paid in capital is the excess capital over an above the par value. 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 per share conclusion. 2 treasury shares at times companies buy back some of the floating shares as part of corporate strategy. For example if there are 10 000 outstanding common shares of a company and each share has a par value of 10 then the value of outstanding share amounts to 100 000.
Book value per share total common stockholders equity preferred stock number of common shares. 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. Book value per share stockholder s equity total number of outstanding common stock.