Stockholders Equity Book Value Per Share Formula

For the purpose of analysis the book value of equity is further divided by a total number of shares to make book value per share.

Stockholders equity book value per share formula. Book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes examples of book value of equity calculations with excel template example 1. From stockholders equity one can get a clear picture of whether a company has sufficient assets to repay its debt whether a company can survive in the long run. 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.

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. Calculate book value per share from the following stockholders equity section of a company. 1 776 000 100 000 shares 17 76 per share of common stock 2.

Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. If company has issued common as well as preferred stock. 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.

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. After such modification we get the following widely used formula to calculate book value 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.

Book value per share. The book value of equity is equal to total assets minus total liabilities preferred stocks and intangible assets. 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 represents equity of the firm on per share basis. This means if the company dissolves the shareholders will receive an amount per share as per book value per share. Book value of share of the company is important for analysis.