Book Value Of Equity Equation
If we apply it to the formula book value of equity total assets total liabilities.
Book value of equity equation. You can find these figures on the balance sheet. How to calculate book value. 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.
To find the equity you should subtract the company s liabilities from its assets. 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. Further book value per share bvps can be computed based upon the equity of the common shareholders in the company.
Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. Book value total common shareholders equity preferred stock number of outstanding common shares. The book value per share is the minimum cash value of a company and its equity for common shareholders.
The book value of equity is simply the difference between the total assets of a business and its total liabilities. The formula for book value per share requires three variables. 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.
Book value per share. This figure represents the minimum value of a company s. It is calculated by multiplying a company s share price by its number of shares outstanding whereas book value or shareholders equity is simply the difference between a company s assets and liabilities.
For the purpose of analysis the book value of equity is further divided by a total number of shares to make book value per share. Total equity preferred equity and total outstanding shares. For example in apple s 1q report released february 1 2018 the company reported total assets of 406 794 billion and liabilities of 266 595 billion.