Book Value Per Share Formula With Example
Book value per share formula example 3.
Book value per share formula with example. The presence of preferred stock in the total stockholders equity however has a significant impact on the calculation. Book value per share 1 50 000 25 000 5 000. The formula for calculating the book value per share of common stock is.
Total number of outstanding shares. Shareholders equity preferred shares. Book value per share 1 25 000 5 000.
If the value of bvps exceeds the market value per share the. With an understanding of what the bvps means ashley can compare this result with how the company is trading on the market. In this case the book value per share for this soda company would be 0 11.
Here s the formula of price to book value price to book value ratio market price per share book value per share. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. We can apply the values to our variables and calculate the book value per share.
Book value per share is determined by dividing common shareholders equity by total number of outstanding shares. Bvps dfrac 9 600 000 3 090 000 61 500 000 0 11. Mostly the book value is calculated for common stock only.
The formulas and examples for calculating book value per share with and without preferred stock are given below. 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 25.