Price To Book Value Per Share Formula
In contrast to book value the market price reflects the future growth potential of the company.
Price to book value per share formula. This example is referred to as price to book value p b in which book value per share is used in the denominator. From there market capitalization and net book value can be calculated. 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 per share rs 30 per share. The book value per share is considered to be the total equity for common stockholders which can be found on a company s balance sheet. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis.
The formula to measure the price to book value is as follows. The book value per share is a little more complicated. Price to book p b stock price per share book value per share book value per share total assets total liabilities number of outstanding shares you can find this information on a company s financial statements.
An asset s book value is equal to its carrying value on the balance sheet and companies. Book value per share formula of utc company shareholders equity available to common stockholders number of common shares. The market price per share is simply the current stock price that the company is being traded at on the open market.
The price to book ratio or market to book ratio can easily be calculated in excel if the following criteria are known. Here s the formula of price to book value price to book value ratio market price per share book value per share. Market share price rs 100.
The price to book value ratio p b formula is also referred to as a market to book ratio and measures the proportion between the market price for a share and the book value per share. Bvps 50 000 2000 25 per share. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.