Book Value Formula Finance

The book value per share is the minimum cash value of a company and its equity for common shareholders.

Book value formula finance. 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. The market to book ratio is calculated by dividing the current closing price of the stock by the most current quarter s book value per share. Market capitalization net book value.

Book value formula calculates the net asset of the company derived by total of assets minus the total liabilities. Book value may also be. It is the carrying value of the asset on the balance sheet of the company and is calculated as the original cost of the asset less the accumulated depreciation accumulated amortization accumulated depletion or accumulated impairment.

We used the average number of shares outstanding because the closing period amount may skew results if there was a stock issuance or major stock buyouts. Where net book value total assets total liabilities. Net book value is the value of an asset as recorded in the books of accounts of a company.

Share price net book value per share. To find the equity you should subtract the company s liabilities from its assets. Total equity preferred equity and total outstanding shares.

Formula for book value per share. 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. Market to book ratio formula.

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. Below is the book value formula. Alternatively book value can be calculated as the sum total of the overall shareholder equity of the company.