Book Value Formula Average
Instead the average book value shall be found by adding the net book value n b v of investment assets at the end of each year as follows.
Book value formula average. You can use this book value calculator. 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. 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.
Book value may also be. 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. For example a company has a p b of.
An asset s book value is equal to its carrying value on the balance sheet and companies. Year 2 years of investment 1 note. It s calculated by dividing the company s stock price per share by its book value per share bvps.
Therefore the calculation of book value per share will be as follows bvps total common shareholders equity preferred stock number of outstanding common shares 2 93 491 00 cr 592 18 cr. Year 0 n b v. The price to book p b ratio is a popular way to compare market value and book value.
Net book value of year 0 will be equal to the initial investment. It is equal to the price per share divided by the book value per share. Other cost include impairment cost and related costs which directly affect the cost of the asset.
Total value of the asset value at which the asset is purchased. Note that the book value of the asset can never dip below the salvage value even if the calculated expense that year is large enough to put it below this value. The formula for price to book value is the stock price per share divided by the book value per share.