Find Book Value Formula

Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis.

Find book value formula. The result tells you what the tangible worth equals after liabilities are subtracted from tangible assets. The book value per share is the minimum cash value of a company and its equity for common shareholders. The formula for book value per share requires three variables.

Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. A conservative approach to evaluating a company s worth is to calculate tangible book value also called net tangible assets. The formula for calculating book value.

The formula doesn t help individuals who aren t involved in running a business. Total equity preferred equity and total outstanding shares. You could certainly calculate the book value of a personal asset like a car.

Generally businesses are instead valued at market value which incorporates future earnings intangible assets and other factors to arrive at an estimated worth. The formula for calculating book value per share is the total common stockholders equity less the preferred stock divided by the number of common shares of the company. Book value per share will be bvps 495 61 book value calculator.

The major limitation of the formula for the book value of assets is that it only applies to business accountants. You can use this book value calculator. As shown at the top of this page book value per share is expressing stockholder s equity on a per share basis.

To find the equity you should subtract the company s liabilities from its assets. Roe is net income divided by stockholder s equity. See how to calculate the market value of a company for more.