Book Value Per Share Expression
Updated november 17 2020.
Book value per share expression. 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 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.
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. Book value indicates the difference between the total assets and the total liabilities and when the formula for book value per share is to divide this book value by the number of common shares. Book value per share bvps is a measure of value of a company s common share based on book value of the shareholders equity of the company.
In other words this measures a company s total assets minus its total liabilities on a per share basis. In the case that the firm dissolves it is the amount the shareholders will receive. Book value per share total common stockholders equity preferred stock number of common shares.
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 bvps is a ratio that weighs stockholders total equity against the number of shares outstanding. Book value per share is a fairly conservative way to measure a stock s value.
Book value of equity per share abbreviated as bvps is a company s available equity to common shareholders apportioned by the number of outstanding common shares. 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 share bvps is a ratio used to compare a firm s common shareholder s equity to the number of shares outstanding.
The book value of a company stripped to basics is the value of the company the stockholders will own if the firm s.