Book Value Of Common Equity Formula

Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes.

Book value of common equity formula. In the case of apple 5 126 201 000 shares results in a book value per common share of 27 35. Divide the result by the number of common shares outstanding. To find the equity you should subtract the company s liabilities from its assets.

The formula for book value per share requires three variables. Book value per share represents equity of the firm on per share basis. You can also use information on the balance sheet to compute the book value per common share.

What does book value of equity mean. The book value of equity is equal to total assets minus total liabilities preferred stocks and intangible assets. 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.

Common stockholder s equity or owner s equity can be found on the balance sheet for the company. 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. Bvps frac total shareholder equity preferred equity total outstanding.

This means if the company dissolves the shareholders will receive an amount per share as per book value per share. The book value per share is the minimum cash value of a company and its equity for common shareholders. The formula for book value per share book value of equity total number of outstanding shares.

Book value of equity also known as shareholder s equity is a firm s common equity that represents the amount available for distribution to shareholders. For this subtract the book value of preferred stock from the total stockholders equity. 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.