How Do You Calculate Book Value Of Equity

For healthy companies equity value far exceeds book value as the market value of the company s shares appreciates over the years.

How do you calculate book value of equity. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes. Book value may also be. Simply subtract liabilities from assets to arrive at book value.

This figure represents the minimum value of a company s. What does book value of equity mean. For example in apple s 1q report released february 1 2018 the company reported total assets of 406 794 billion and liabilities of 266 595 billion.

It is calculated by multiplying a company s share price by its number of shares outstanding whereas book value or shareholders equity is simply the difference between a company s assets and liabilities. You can find these figures on the balance sheet. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes.

Calculate book value of equity by subtracting a firm s total liabilities from its total assets to arrive at stockholders equity. How to calculate book value. Net income on a per share basis is referred to as eps or earnings per share.

Book value of equity also known as shareholder s equity is a firm s common equity that represents the amount available for distribution to shareholders. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.

Book value total common shareholders equity preferred stock number of outstanding common shares. The book value of equity is equal to total assets minus total liabilities preferred stocks and intangible assets.