Book Value Per Share Less Than Market Value Per Share

The market price per share is simply the current stock price that the company is being traded at on the open market.

Book value per share less than market value per share. Book value gives us the actual worth of the assets owned by the company whereas market value is the projected value of the firms or the assets worth in the market. If the value of bvps exceeds the market value per share the. Market value per share is the current value at which the stock is trading in the market.

Book value per share is a fairly conservative way to measure a stock s value. The next day the market price drops and the p b ratio is less than 1 meaning market value is less than book value. The price to book ratio formula is calculated by dividing the market price per share by book value per share.

The book value of a company stripped to basics is the value of the company the stockholders will own if the firm s. Face value is the value of a company listed in its books of the company and share certificate. About 4 8 billion shares were outstanding at the time so the book value per share was about 23 96 per share.

If a p b ratio is less than one the shares are selling for less than the. 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. A simple calculation dividing the company s current stock price by its stated book value per share gives you the p b ratio.

Book value is equal to the value of the firm s equity while market value indicates the current market value of any firm or any asset. The book value per share is a little more complicated. And finally the book value of a company is the total value of the company s assets that shareholders will receive in case the company gets liquidated.

Comparing bvps to a stock s market price could help value investors find opportunities. The information needed to calculate bvps is found on a company s balance sheet. For example a company has a p b of.