What Is Book Value Formula In Finance
The stock price per share can be found as the amount listed as such through the secondary stock market.
What is book value formula in finance. Book value of equity formula it is calculated by adding the owner s capital contribution treasury shares retained earnings and accumulated other incomes. It is as good as the net asset value of a company which can be easily ascertained by taking all the assets less depreciation and liabilities. Formula to calculate book value of a company.
The book value per share is considered to be the total equity for common stockholders which can be found on a company s balance sheet. Book value is a widely used financial metric to determine a company s value and to ascertain whether its stock price is over or under appreciated. Book value us 375 32 billion us 241 27 billion us 134 05 billion book value per share for the purpose of analysis the book value of equity is further divided by a total number of shares to make book value per share.
Patents goodwill and liabilities. The formula for price to book value is the stock price per share divided by the book value per share. 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.
Book value of equity total assets total liabilities apple inc. This figure represents the minimum value of a company s. For the initial outlay of an investment.
Book value formula calculates the net asset of the company derived by total of assets minus the total liabilities. Here s the formula of price to book value price to book value ratio market price per share book value per share. Alternatively book value can be calculated as the sum total of the overall shareholder equity of the company.
The price to book value ratio p b formula is also referred to as a market to book ratio and measures the proportion between the market price for a share and the book value per share. On the other side book value is a value derived from the latest available balance sheet of a company. Book value may also be.