Book Value Per Common Share

Book value per share conclusion.

Book value per common share. What is the book value per share bvps. The formula for book value per share requires three variables. 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 equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. This figure represents the minimum value of a company s. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.

1 776 000 100 000 shares 17 76 per share of common stock 2. 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. Total equity preferred equity and total outstanding shares.

To find the equity you should subtract the company s liabilities from its assets. If company has issued common as well as preferred stock. 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.

After such modification we get the following widely used formula to calculate book value 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. Calculate book value per share from the following stockholders equity section of a company.

15 million stockholders equity 3 million preferred stock 2 million average shares outstanding 6 book value per share. Book value per share total common stockholders equity preferred stock number of common shares. Notice the only the equity applicable to common shareholders is used.