How Do You Find Book Value Per Share
Divide the available equity by the common shares outstanding to determine the book value per share of common stock.
How do you find book value per share. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. If the value of bvps exceeds the market value per share the. 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.
Market capitalization net book value. 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. In our example 80 000 divided by 50 000 shares equals a book value per share of common stock of 1 60.
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 is a fairly conservative way to measure a stock s value. The market to book ratio is calculated by dividing the current closing price of the stock by the most current quarter s book value per share.
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. 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. Book value of equity represents the fund that belongs to the equity shareholders and is available for the distribution to the shareholders and it is calculated as the net amount remaining after the deduction of all the liabilities of the company from its total assets.
To calculate the book value per share you must first calculate the book value then divide by the number of common shares. This figure represents the minimum value of a company s. The book value of a company stripped to basics is the value of the company the stockholders will own if the firm s.
How do you calculate book value per share. Market to book ratio formula the market to book formula is.