Formula Book Value Of Equity
This figure represents the minimum value of a company s.
Formula book value of equity. The formula for book value per share book value of equity total number of outstanding shares. This means if the company dissolves the shareholders will receive an amount per share as per book value per share. Book value per share represents equity of the firm on per share basis.
Book value of equity formula. Using the accounting equation the book value of equity formula can be stated as follows. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.
This leaves a residual amount available for distribution to investors the concept is used to establish the minimum amount that a business should be worth which can be considered the lowest price at which the sum total of its stock should trade. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes. Equity assets liabilities.