Formula For Computing Book Value Per Share

The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding.

Formula for computing book value per share. Book value per share 1 50 000 25 000 5 000. Book value per share formula of utc company shareholders equity available to common stockholders number of common shares. Book value per share shareholders equity preferred equity total outstanding common shares.

Book value per share 1 25 000 5 000. 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 share total equity preferred shares average of outstanding ordinary shares from the equation above this metric only measures the value of ordinary shares.

Formula to calculate book value per share. The book value per common share formula below is an accounting measure based on historical transactions. Shareholders equity is the remaining amount of assets after all liabilities have been paid.

Total number of outstanding shares. Shareholders equity preferred shares. Investors need to look at both the book value and market value of the share.

If the investors can find out the book value of common stocks she would be able to figure out whether the market value of the share is worth it. Roe is net income divided by stockholder s equity. Book value per share of jagriti group of companies is 25.

Net income on a per share basis is referred to as eps or earnings per share. So you have to deduct the total shareholder equity with preferred shares. Preferred equity is a measure of equity which only takes into account the preferred stockholders and disregards the common stockholders.