Book Value Per Share Calculation

The formula for book value per share requires three variables.

Book value per share calculation. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. As shown at the top of this page book value per share is expressing stockholder s equity on a per share basis. For example suppose you have 1 000 shares of a company and the book value per share is rp5.

Roe is net income divided by stockholder s equity. That is the amount that ordinary shareholders will receive when the company is liquidated. 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.

Higher book value means the shares have more liquidation value. Book value per share conclusion. Net income on a per share basis is referred to as eps or earnings per share.

Book value per share is determined by dividing common shareholders equity by total number of outstanding shares. To find the equity you should subtract the company s liabilities from its assets. Total equity preferred equity and total outstanding shares.

15 million stockholders equity 3 million preferred stock 2 million average shares outstanding 6 book value per share three things to know. The higher the book value the more the share is worth. Total outstanding shares total number of shares issued shares as treasury stock.

Here s the formula of price to book value price to book value ratio market price per share book value per share. Book value per share. If the value of bvps exceeds the market value per share the.