Tangible Book Value Formula

The price to tangible book value ptbv is a valuation ratio expressing the price of a security compared to its hard or tangible book value as reported in the company s balance sheet.

Tangible book value formula. These items can be found on the balance sheet which is a financial statement that summarizes a company s financial position as of a given time usually the end of a fiscal year or quarter. Book value formula calculates the net asset of the company derived by total of assets minus the total liabilities. The formula for tbvps is.

The total value of net tangible assets are sometimes referred to as the company s book value or net asset value formula for net tangible assets nta nta total assets intangible assets total liabilities. Let s assume company xyz has 10 million in tangible assets which appears on the balance sheet and 1 million shares outstanding. Net tangible assets which is also referred to as net tangible book value is calculated by subtracting intangible assets and liabilities from total assets.

Tbvps determines the potential value per share of a company in the event. For example if abc bank had 10. According to the formula company xyz s tbvps is.

The company also recorded 15 000 000 of tangible book value last year. How does tangible book value per share tbvps work. To calculate the tangible book value per share malcolm finds that the firm s number of shares outstanding is 2 000 000 million.

A conservative approach to evaluating a company s worth is to calculate tangible book value also called net tangible assets. Price to tangible book value share price tangible book value per share. Tbvps 10 000 000 1 000 000 10 00 why does tangible book value per share tbvps matter.

The result tells you what the tangible worth equals after liabilities are subtracted from tangible assets. The formula for the price to tangible book value is. The formula is the company s assets minus liabilities intangible assets and the value of preferred stock.