Book Value Of Common Stock 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 stock formula. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis. To find the equity you should subtract the company s liabilities from its assets. The formula states that the numerator part is what the firm receives by the issuance of common equity and that figure increases or decreases depending upon the company is making profit or loss and then finally it decreases by issuing dividend and preference stock.

Book value per share stockholder s equity total number of outstanding common stock. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. Book value may also be.

What is the book value per share bvps. Total equity preferred equity and total outstanding shares. The formula for calculating the book value per share of common stock is.

Bvps frac total shareholder equity preferred equity total outstanding. Net income on a per share basis is referred to as eps or earnings per share. The book value per common share formula below is an accounting measure based on historical transactions.

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

The formula for book value per share requires three variables. Common stock can be calculated using the formula given below common stock total equity preferred stock additional paid in capital retained earnings treasury stock common stock 1 000 000 300 000 200 000 100 000 100 000 common stock 500 000. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.