Book Value Per Share Investopedia

Other components of investing a company s book value and its book value per share are just two small components of an overall investment calculation and strategy.

Book value per share investopedia. The book value per share is calculated using historical costs but the market value per share is a forward looking metric that takes into account a company s earning power in the future. 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.

Book value per share can be used to generate a measure of comprehensive earnings when the opening and closing values are reconciled. Book value per share bvps takes the ratio of a firm s common equity divided by its number of shares outstanding. The information needed to calculate bvps is found on a company s balance sheet.

Apple stock closed on june 29 2018 at 185 11 per share. Total value reports the current total dollar value of your holdings. Price to book ratio market price per share book value per share.

With increases in a company s estimated profitability expected growth and safety of its business the market value per share grows higher. We can get book value per share by the difference of total liabilities and total assets and divide the result of this by the total number of outstanding shares on that date. Book value per share is a ratio that compares the net asset value of a company minus preferred equity to the total number of common shares available on the market.

Since you bought only 100 shares of wmt its total value will be equal to 100 times its market value per share. Current stock of the company which company is being trading in the open market is called market price per share. Book value of equity per share effectively indicates a firm s net asset value.

Market value displays the current market value per share. Comparing bvps to a stock s market price could help value investors find opportunities. About 4 8 billion shares were outstanding at the time so the book value per share was about 23 96 per share.