Book Value Of Shareholders Equity Formula
Total equity preferred equity and total outstanding shares.
Book value of shareholders equity formula. 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. This figure represents the minimum value of a company s. To find the equity you should subtract the company s liabilities from its assets.
The formula for book value per share requires three variables. The formula for book value per share book value of equity total number of outstanding shares taking above example of apple inc we can calculate the book value per share as follows. For healthy companies equity value far exceeds book value as the market value of the company s shares appreciates over the years.
The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. 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. Calculate book value of equity by subtracting a firm s total liabilities from its total assets to arrive at stockholders equity.
Book value per share us 134 05 billion 5 126 billion shares us 26 15. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of 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. How to calculate shareholders equity. Shareholders equity may be calculated by subtracting its total liabilities from its total assets both of which are itemized on a company s balance sheet.
Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes.