How Do You Calculate Book Value Per Share
To calculate the book value per share you must first calculate the book value then divide by the number of common shares.
How do you calculate book value per share. How do you calculate 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. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes.
As shown at the top of this page book value per share is expressing stockholder s equity on a per share basis. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis.
Net income on a per share basis is referred to as eps or earnings per share. Also since you re working with common shares you must subtract the preferred shareholder equity from the total equity. If the value of bvps exceeds the market value per share the.
Roe is net income divided by stockholder s equity. 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. 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.