Book Value Per Common Share Ratio

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.

Book value per common share ratio. Book value per share is a fairly conservative way to measure a stock s value. 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. 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 per share is usually used to compute the value or price per share of. Comparing bvps to a stock s market price could help value investors find opportunities. Book value per share is a ratio that compares the net asset value of a company minus preferred equity to the total number of common shares available on the market.

The book value per common share is a financial ratio that calculates amount of equity applicable to each outstanding common stock. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. If the investors can find out the book value of common stocks she would be able to figure out whether the market value of the share is worth it.

What is book value per share bvps. 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. 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 information needed to calculate bvps is found on a company s balance sheet. What does book value per share mean. It indicates the level of safety associated with each common share after removing the effects of liabilities.

If the value of bvps exceeds the market value per share the. In the case that the firm dissolves it is the amount the shareholders will receive. Book value per share bvps is a ratio used to compare a firm s common shareholder s equity to the number of shares outstanding.