Book Value Formula Example

Or p b ratio 105 84 5 4 1 25.

Book value formula example. Calculate the book value per share. Stock 1 has a high market capitalization relative to its net book value of assets so its price to book ratio is 3 9x. Book value per share is determined by dividing common shareholders equity by total number of outstanding shares.

Using the p b ratio formula we get p b ratio formula market price per share 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.

Total number of outstanding shares. 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. To find out the p b ratio formula we need the market price per share and book value per share.

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. You can use this book value calculator. Book value per share will be bvps 495 61 book value calculator.

If the value of bvps exceeds the market value per share the. Book value per share. In other words the book value of equity divided by the number of shares issued.

In the above example we know both. Total outstanding shares total number of shares issued shares as treasury stock. To calculate the book value of a company you subtract the value of its total liabilities and intangible assets from the value of its total assets.