Book Value Per Share Analysis
The formula for book value per share requires three variables.
Book value per share analysis. Book value per share is the same as. Book value per share conclusion. Net working capital per share.
Total equity preferred equity and total outstanding shares. 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. This is important because if you invest in companies that are not stable and may be speculative you want to know how much you will potentially receive should the company go under.
If book value per share is calculated with just common stock in the denominator then it results in a measure of the amount that a common shareholder would receive upon liquidation of the company. Market value per share is obtained by simply looking at the. If the value of bvps exceeds the market value per share the.
The formula for book value per share is to subtract preferred stock from stockholders equity and divide by the average number of shares outstanding. 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. In this equation book value per share is calculated as follows.
Fair market value of assets per share. Net asset cost 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.
The book value per share is the minimum cash value of a company and its equity for common shareholders. Total assets total liabilities number of shares outstanding. Net tangible asset value per share.