Book Value Of Stock

If you want to compare companies you can convert to book value per share which is simply the book value divided by the number of outstanding shares.

Book value of stock. If you look up any balance sheet you will find that it is divided in 3 sections. Other components of investing. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.

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. Often book value is expressed on a per share basis dividing the total shareholder equity by the number of shares of stock outstanding. The book value calculation in practice is even simpler.

How to calculate book value. The book value of a stock book value of total assets total liabilities. The formula states that the numerator part is what the firm receives by the issuance of common equity and that figure increases or decreases depending upon the company is making profit or loss and then finally it decreases by issuing dividend and preference stock.

Book value total common shareholders equity preferred stock number of outstanding common shares. 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. The stock price per share can be found as the amount listed as such through the secondary stock market.

The formula for price to book value is the stock price per share divided by the book value per share. Using book value in investing book value appeals more to value investors who look at the relationship to the stock s price by using the price to book ratio. Assets liabilities and shareholders equity.

The book value per share is considered to be the total equity for common stockholders which can be found on a company s balance sheet.