What Is Book Value Formula In Finance
On the other side book value is a value derived from the latest available balance sheet of a company.
What is book value formula in finance. The stock price per share can be found as the amount listed as such through the secondary stock market. Book value may also be. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.
The formula for price to book value is the stock price per share divided by the book value per share. Here s the formula of price to book value price to book value ratio market price per share book value per share. Patents goodwill and liabilities.
Book value formula calculates the net asset of the company derived by total of assets minus the total liabilities. For the initial outlay of an investment. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes.
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. Alternatively book value can be calculated as the sum total of the overall shareholder equity of the company. It is as good as the net asset value of a company which can be easily ascertained by taking all the assets less depreciation and liabilities.
Book value of equity total assets total liabilities apple inc. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes. Book value is also the tangible net asset value of a company calculated as total assets minus intangible assets e g.
Book value is a widely used financial metric to determine a company s value and to ascertain whether its stock price is over or under appreciated. Formula to calculate book value of a company. The formula for calculating book value per share is the total common stockholders equity less the preferred stock divided by the number of common shares of the company.