How To Calculate Book Value Of Equity Shares

You can find these figures on the balance sheet.

How to calculate book value of equity shares. 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. As shown at the top of this page book value per share is expressing stockholder s equity on a per share basis. Calculate book value of equity by subtracting a firm s total liabilities from its total assets to arrive at stockholders equity.

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. Book value may also be. Net income on a per share basis is referred to as eps or earnings per share.

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. This figure represents the minimum value of a company s. How to calculate book value.

The formula for book value per share book value of equity total number of outstanding shares taking above example of apple inc we can calculate the book value per share as follows. 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. 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. The formula states that the numerator part is what the firm receives by the issuance of common equity and that figure increases or decreases depending upon the company is making profit or loss and then finally it decreases by issuing dividend and preference stock.

Roe is net income divided by stockholder s equity. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes. Book value per share us 134 05 billion 5 126 billion shares us 26 15.