Tangible Book Value Per Share Negative

Understanding price to tangible book value ptbv in theory a stock s tangible book value per share represents the amount of money an investor would receive for each share if a company were to.

Tangible book value per share negative. I assume that since the stock is rated as enterprising the tbvps is positive and that the goodwill line item was used. Book value is also the tangible net asset value of a company calculated as total assets minus intangible assets e g. The company also recorded 15 000 000 of tangible book value last year.

Net tangible assets per share is calculated by taking a company s net tangible asset number and dividing it by the total number of shares outstanding. An asset s book value is equal to its. If there were 1 million shares of stock it would have a negative value of 1 00 per share.

In reviewing hnna s balance sheet for 2019 i used the other intangibles of 80 6m in calculating the tangible book value per share resulting in a negative tbvps. The tangible book value per share tbvps shows the amount per share that shareholders would expect if the firm was liquidated today. The tbv excludes a firm s intellectual property patents and trademarks because these are intangible assets that cannot be easily sold such as property plant and equipment.

If book value is negative where a company s liabilities exceed its assets this is known as a balance sheet insolvency. Price to tangible book value share price tangible book value per share for example let s assume that company xyz has 10 000 000 shares outstanding which are trading at 3 per share. If they have 1 million in cash equipment accounts receivable and they owe 2 million for bonds and accounts payable there would be a negative value.

Since preferred stockholders have a higher claim on assets and earnings than. Patents goodwill and liabilities. For the initial outlay of an investment.