Book Value Of Equity Is Equal To

What does book value of equity mean.

Book value of equity is equal to. 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. Book value of equity total assets total liabilities. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.

This figure represents the minimum value of a company s. Book value per share. 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.

In practical terms market value reflects the theoretical cost of buying all shares of the company. Book value shows the actual cost or acquisition cost of the asset whereas the other indicates the current market trends. Market value of equity market price per share x total number of outstanding shares.

Book value is equal to the value of the firm s equity while market value indicates the current market value of any firm or any asset. What is book value of equity. The book value of equity is equal to total assets minus total liabilities preferred stocks and intangible assets.

The term book value of equity refers to a firm s or company s common equity which is the amount available that can be distributed among the shareholders and it is equal to the amount of assets shareholders own outright after all the liabilities have been paid off. This doesn t necessarily mean that during a takeover or a merger the company will be sold at the market value.