Book Value Per Share Wiki

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 wiki. The price to book ratio or p b ratio is a financial ratio used to compare a company s current market price to its book value the calculation can be performed in two ways but the result should be the same each way. Investors can calculate book value per share by dividing the company s book value by. 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.

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. The book value of a share of stock is represented as book value per share. This figure represents the minimum value of a company s.

This number is determined by dividing the company s total amount of stockholders equity by the number of outstanding shares of common stock. What is book value per share. Book value per share compares the amount of stockholders equity to the number of shares outstanding.

It may be factored into a general investigation of what the market price of. In the first way the company s market capitalization can be divided by the company s total book value from its balance sheet the second way using per share values is to divide. If there are 10 million shares outstanding each share would represent 2 50 of book value.

In the first way the company s market capitalization can be divided by the company s total book value from its balance sheet the second way using per share values is to divide. If the share price is 5 then the p b ratio would be 2x 5 2 50. Book value per share can be used to generate a measure of comprehensive earnings when the opening and closing values are reconciled.

Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares. If the market value per share is lower than the book value per share then the stock price may be undervalued. Book value per share is a way to measure the net asset value that investors get when they buy a share of stock.