Book Value Per Share Analysis Interpretation

The book value per share may be used by some investors to determine the equity in a company relative to the market value of the company which is the price of its stock.

Book value per share analysis interpretation. Book value per share analysis. Book value per share. Unlike the pb ratio the mb formula compares values on a company wide basis.

Comparing bvps to a stock s market price could help value investors find opportunities. 0 06 per share with 1 million shares outstanding means the book value of the company is 60 000. For example a company that is currently trading for 20 but has a book value of 10 is selling at twice its equity.

We first subtract the total liabilities from the total assets and divide the difference by the total number of shares outstanding on that date. The book value per share is a little more complicated. The book value per share is a finance tool used to assess the current stock price of a company.

While book value per share is a good way to evaluate a stock it s more of an accounting based tool and doesn t necessarily reflect the true market value of a publicly traded company companies. Book value per share compares the amount of stockholders equity to the number of shares outstanding. Yes q2 5 71 for every dollar of assets gapp audited.

It is the amount that shareholders would receive if the company dissolves realizes cash equal to the book value of its assets and pays liabilities at their book value. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. Book value per share is the gaap number number of shares outstanding.

The information needed to calculate bvps is found on a company s balance sheet. Ideally investors are searching for stocks that have not peaked in their value. They want to be able to jump in early to then see the company grow.