Book Value Of Equity Per Share Meaning

In the case that the firm dissolves it is the amount the shareholders will receive.

Book value of equity per share meaning. Book value per common share or simply book value per share bvps is a method to calculate the per share book value of a company based on common shareholders equity in the company. Book value is based on the amount the company has invested in its assets but not their current market value. In that sense book value and book value per share reflect a minimum value of a company s equity.

Book value of equity meaning the book value of equity more widely known as shareholder s equity is the amount remaining after all the assets of a company are sold and all the liabilities are paid off. 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. The book value of equity per share is a financial measure which indicates a per share estimation of the minimum value of an entity s equity.

Book value of equity per share abbreviated as bvps is a company s available equity to common shareholders apportioned by the number of outstanding common shares. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. 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.

The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. What is the book value per share bvps. Investors commonly use bvps to determine if a stock price is under or overvalued by looking at the company s current state.

The book value of equity is equal to total assetsminus 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. Although the book value of equity per share is a factor that can be used by the investors to determine the value of stock it presents only a limited value of the firm s situation.

In other words as suggested by the term itself it is that value of asset which reflects in the balance sheet of a company or books of a company. What is book value per share bvps. What does book value per share mean.