Formula For Computing Book Value Per Share

Book value per share shareholders equity preferred equity total outstanding common shares.

Formula for computing book value per share. Total number of outstanding shares. Formula to calculate book value per share. Book value per share 1 50 000 25 000 5 000.

Book value per share formula of utc company shareholders equity available to common stockholders number of common shares. Shareholders equity is the remaining amount of assets after all liabilities have been paid. Bvps frac total shareholder equity preferred equity total outstanding.

If the investors can find out the book value of common stocks she would be able to figure out whether the market value of the share is worth it. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. Outstanding the formula requires you to know the company s total equity.

Preferred equity is a measure of equity which only takes into account the preferred stockholders and disregards the common stockholders. So you have to deduct the total shareholder equity with preferred shares. Now by using the below formula we can calculate book value per share.

Net income on a per share basis is referred to as eps or earnings per share. The book value per common share formula below is an accounting measure based on historical transactions. Book value per share total equity preferred shares average of outstanding ordinary shares from the equation above this metric only measures the value of ordinary shares.

Book value per share 1 25 000 5 000. 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. Investors need to look at both the book value and market value of the share.