Net Book Value Of Equity Formula

The formula for book value per share book value of equity total number of outstanding shares taking above example of apple inc we can calculate the book value per share as follows.

Net book value of equity formula. The formula for calculating nbv is as follows. Total assets is calculated using the formula given below total assets accounts receivables inventories net fixed assets cash at bank total assets 500 000 1 500 000 1 000 000 50 000 total assets 3 050 000. Book value of equity per share bvps is the ratio of equity available to common shareholders divided by the number of outstanding shares.

Calculate book value of equity by subtracting a firm s total liabilities from its total assets to arrive at stockholders equity. Return on equity return on equity roe return on equity roe is a measure of a company s profitability that takes a company s annual return net income divided by the value of its total shareholders equity i e. This figure represents the minimum value of a company s.

Sample calculation of net book value. It is not the same as shareholders fund. Roe combines the income statement and the balance sheet as the net income or profit is compared to the shareholders equity.

You can find these figures on the balance sheet. Net book value original asset cost accumulated depreciation. Mathematically it is represented as book value of equity formula owner s contribution treasury shares retained earnings accumulated other incomes.

Calculating net book value. It cannot be found in balance sheet. Book value of equity also known as shareholder s equity is a firm s common equity that represents the amount available for distribution to shareholders.

For example in apple s 1q report released february 1 2018 the company reported total assets of 406 794 billion and liabilities of 266 595 billion. Accumulated depreciation per year depreciation x total number of years. When it reaches the end of its useful life the nbv should be equal to its salvage value.