Book Value Of Share Formula
Formula and calculation of p b ratio in this equation book value per share is calculated as follows.
Book value of share formula. Bvps frac total shareholder equity preferred equity total outstanding. The price to book value ratio p b formula is also referred to as a market to book ratio and measures the proportion between the market price for a share and the book value per share. The book value of a share of stock is represented as book value per share.
Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis. Here is the formula. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.
To find the equity you should subtract the company s liabilities from its assets. So if the company has 10 000 000 in stockholders equity and 1 000 000 shares of stock outstanding the book value of each. 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.
Book value per share total equity preferred shares average of outstanding ordinary shares from the equation above this metric only measures the value of ordinary shares. Book value per share conclusion the book value per share is the minimum cash value of a company and its equity for common shareholders. Here s the formula of price to book value price to book value ratio market price per share book value per share.
Now by using the below formula we can calculate book value per share. Total assets total liabilities number of shares outstanding. Net income on a per share basis is referred to as eps or earnings per share.
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. Total equity preferred equity and total outstanding shares. This number is determined by dividing the company s total amount of stockholders equity by the number of outstanding shares of common stock.