Calculate Book Value Per Common Share

The book value per share is the minimum cash value of a company and its equity for common shareholders.

Calculate book value per common share. If company has issued common as well as preferred stock. 2 treasury shares at times companies buy back some of the floating shares as part of corporate strategy. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.

Example of book value per common share international corporation has 2000000 of stockholders equity 500000 of preferred stock and total of 300000 shares outstanding during the measurement period. To find the equity you should subtract the company s liabilities from its assets. For example if there are 10 000 outstanding common shares of a company and each share has a par value of 10 then the value of outstanding share amounts to 100 000.

Book value per share conclusion. 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 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. After such modification we get the following widely used formula to calculate book value per share. Book value per share stock holders equity preferred stock total outstanding shares.

If the value of bvps exceeds the market value per share the. The formula for book value per share requires three variables. How to find book value per share of common stock.

1 776 000 100 000 shares 17 76 per share of common stock 2. Common stock is the equity capital at the par value of the shares and the additional paid in capital is the excess capital over an above the par value. Book value per share total common stockholders equity preferred stock number of common shares.