Book Value Per Share Formula Cfa

To find the equity you should subtract the company s liabilities from its assets.

Book value per share formula cfa. Total equity preferred equity and total outstanding shares. As such book value only looks at the company s past while market value should be based on the company s future. 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.

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 conclusion. The formula for book value per share requires three variables.

The book value per share is the minimum cash value of a company and its equity for common shareholders. 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 bvps refers to a company s total shareholders equity divided by the total number of shares outstanding. If a company has a high price to book ratio market price per share divided by book value of equity per share relative to its industry peers the market likely has high growth expectations for the company. Market price of share p bv book value per share market value of common shareholders equity p bv book value of common shareholders equity where.

The book value per common share formula below is an accounting measure based on historical transactions. Pengertian book value per share nilai buku per saham dan rumusnya book value per share bvps atau dalam bahasa indonesia disebut dengan nilai buku per saham adalah rasio yang digunakan untuk membandingkan ekuitas pemegang saham dengan jumlah saham yang beredar. Ev enterprise.

Book value per share 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. It is important to note what the impact is given that the bvps i used in the computation of the price to book value ratio which is a popular metric used in equity valuation. If the value of bvps exceeds the market value per share the.