Calculating Book Value Per Share From Balance Sheet

Book value per share of jagriti group of companies is 47 14.

Calculating book value per share from balance sheet. 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. Its balance sheet it is the value that company s shareholders would receive after company liquidate all its assets and satisfy all its short term and long term liabilities. Otherwise the book value per share would be inflated and inaccurate.

While considering book value per share as one of the criteria for investing decision its suggested to look for the actual valuation of assets in the balance sheet. It is the amount that shareholders would receive if the company dissolves realizes cash equal to the book value of its assets and pays liabilities at their book value. Book value per share bvps is a measure of value of a company s common share based on book value of the shareholders equity of the company.

The formula for calculating the book value per share of common stock is. Book value per share 2 10 000 45 000 3500. A land may be at cost on the balance sheet whereas market price would be.

Divide the firm s total common stockholder s equity by the average number of common shares outstanding. On google finance we see that their balance sheet shows equity of 42 5 billion. 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.

Book value per share 47 14. Say that hewlett packard nyse. Definition of book value book value as the name suggests is the value of the company as per its books i e.

For example if the firm s total common stockholder s equity is 6 3 million and the average number of common shares outstanding is 100 000 then the stock price s book value for the firm would be 63. What is the book value per share bvps. The book value per share can be used for calculating the per share value of a company.