Book Value Outstanding Formula

This book value can be found in the balance sheet under long term liability and.

Book value outstanding formula. Also stocks outstanding is an important parameter used in the calculation of price to book value p b ratio which is an indicator of how much shareholders are paying for the net assets of a company. If the value of bvps exceeds the market value per share the. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.

How to calculate book value. Book value may also be. 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.

Book value total common shareholders equity preferred stock number of outstanding common shares. The term book value is a company s assets minus its liabilities and is sometimes referred to as stockholder s equity owner s equity shareholder s equity or simply equity. Book value of debt is the total amount which the company owes which is recorded in the books of the company.

Book value of debt definition. As the number of outstanding stock decreases by 1 000 the company s eps increases by 6 54. It is basically used in liquidity ratios where it will be compared to the total assets of the company to check if the organization has enough support to overcome its debt.

To make this easier convert total book value to book value per share. 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. From the information we can calculate the book value per share as.

Divide 35 million by 1 4 million shares for a book value per share of 25. Why use average shares outstanding. It can deflect the results you get.