Total Book Value Formula
How to calculate book value.
Total book value formula. But i thought in your question you wanted to know the book value of total debt not the book value of equity. Book value of debt formula long term debt notes payable current portion of long term debt how to calculate book value of debt. We used the average number of shares outstanding because the closing period amount may skew results if there was a stock issuance or major stock buyouts.
Book value of assets formula assets book value formula total value of an asset depreciation other expenses directly related to it total value of the asset value at which the asset is purchased depreciation periodic reduction in the value of the asset amortized as per standards. At the bottom the total value accounts for depreciation to reveal the company s total book value of all of these assets. To make this easier convert total book value to book value per share.
Generally businesses are instead valued at market value which incorporates future earnings intangible assets and other factors to arrive at an estimated worth. The formula is given by. Divide 35 million by 1 4 million shares for a book value per share of 25.
The formula for calculating the book value per share is given as follows. It is calculated to make a sum of money borrowed and is due to be paid in the balance sheet. The formula for calculating book value per share is the total common stockholders equity less the preferred stock divided by the number of common shares of the company.
The book value of a business is found by subtracting its total liabilities from its total assets. See how to calculate the market value of a company for more. Book value total common shareholders equity preferred stock number of outstanding common shares.
Suppose a company has a book value of 35 million and there are 1 4 million common shares outstanding. Book value may also be. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes.