Net Book Value Of Equity Formula

Net book value original asset cost accumulated depreciation.

Net book value of equity formula. Book value per share us 134 05 billion 5 126 billion shares us 26 15. Sample calculation of net book value. Roe combines the income statement and the balance sheet as the net income or profit is compared to the shareholders equity.

Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. Calculating net book value. Return on equity return on equity roe return on equity roe is a measure of a company s profitability that takes a company s annual return net income divided by the value of its total shareholders equity i e.

It cannot be found in balance sheet. The formula for calculating nbv is as follows. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes.

This figure represents the minimum value of a company s. 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. 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.

Accumulated depreciation per year depreciation x total number of years. Market value of equity mv market price per share p x number of issued ordinary share common stock. It is not the same as shareholders fund.

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. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. When it reaches the end of its useful life the nbv should be equal to its salvage value.