Book Value Formula For Banks

Book value of assets formula.

Book value formula for banks. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. Historical p b current price book value historical forward p b current price book value forward forecast the price to book value of history is relatively straightforward to find out from the balance sheet. Bvps 67309 1096.

Implied or target p bv roe g coe g where p share price bv book value per share. Book value per share will be bvps 495 61 book value calculator. Book value per share book value per share is a good measure to value bank stocks.

Book value may also be. As you have seen calculating the book value per share of banks is pretty easy and you can use this same formula to find the book value of any company you wish. The above method is shown in the following formula.

That wraps up our look at the balance sheets of many different financial institutions and banks. Like the trailing pe and the forward pe we can have a similar formula for price to book value. Book value of assets is defined as the value of an asset in the books of records of a company or institution or an individual at any given instance.

Derive the price book value multiple that a banking stock should trade at by comparing the bank s profitability to its cost of equity capital adjusted for the growth rate. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes. The price to book p b ratio is applied with a bank s stock price compared to equity book value per share meaning.

For companies it is calculated as the original cost of the asset less accumulated depreciation and impairment costs. 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. Book value per share book value per share tells investors what a bank s or any stock s book value is on a per share basis.