Formula For Book Value Per Share

The formula for book value per share requires three variables.

Formula for book value per share. The book value per share is the minimum cash value of a company and its equity for common shareholders. 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. Total outstanding shares total number of shares issued shares as treasury stock.

Total equity preferred equity and total outstanding shares. Book value per share is determined by dividing common shareholders equity by total number of outstanding shares. Calculate book value per share from the following stockholders equity section of a 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. If the value of bvps exceeds the market value per share the. This figure represents the minimum value of a company s.

That is the amount that ordinary shareholders will receive when the company is liquidated. 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. Bvps frac total shareholder equity preferred equity total outstanding.

The book value per common share formula below is an accounting measure based on historical transactions. To find the equity you should subtract the company s liabilities from its assets. 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. The preferred stock shown above in the stockholders equity section is cumulative and dividends amounting to 48 000 are in arrears. The market price value calculated based on the net value of the enterprise is divided by the total share float is the book value per share.