Formula de book value per common share meaning

The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. Book value indicates the difference between the total assets and the total liabilities and when the formula for book value per share is to divide this book value by the number of common shares. Dividing this by the number of shares will give the book value per share. Book value per share bvps is a ratio used to compare a firms common shareholders equity to the number of shares outstanding. It is calculated by dividing the current closing price of. Book value per share bvps takes the ratio of a firms common equity divided by its number of shares outstanding. When compared with the market value, book value can indicate whether a stock is overvalued or undervalued. What is book value per share definition and meaning.

Bvpstot al outstanding shares total shareholder equity. Book value per share calculator for common stock finance. Book value per common share is a measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. The book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders. Book value per share formula, calculator and example. A corporations total stockholders equity excluding preferred stock divided by the number of shares of common stock outstanding. Depreciation is the reduction of an items value over time.

The book value per share bvps is calculated by taking the ratio of equity. The book value per common share formula below is an accounting. An assets book value is equal to its carrying value on the balance sheet, and companies. Also defined as a firms next asset value, book value per share is essentially the. The book value per common share is a financial ratio that calculates amount of equity applicable to each outstanding common stock. What is book value per share and how can it help you in investing.

Be sure to use the average number of shares, since the periodend amount may incorporate a recent stock buyback or issuance, which will skew the results. Online finance calculator which helps to calculate the book value per share from the values of stack holders equity, preferred stock and total outstanding shares. Book value of equity per share effectively indicates a firms net asset value. Book value per common share or, simply book value per share bvps is a method to calculate the pershare book value of a company based on common shareholders equity in the company. In other words, the value of all shares divided by the number of shares issued. Stocks trading below their book value can give decent. Book value per share is a widely used stock evaluation measure. In the case that the firm dissolves, it is the amount the shareholders will receive. Equity preferred equity total outstanding common shares. Book value per share bvps is the minimum cash value of a company and its equity.

Its calculated by dividing the companys stock price per share by its book value per share bvps. The book value per share may be used by some investors to determine the equity in a company relative to the market value of the company, which is the price of its stock. Pricetobook ratio pb ratio definition investopedia. Book value per share formula how to calculate bvps. What this means is that shares are being purchased and sold due to the. Book value of an asset refers to the value of an asset when depreciation is accounted for. When compared to the current market value per share, the book value per share can provide information on how a companys stock is valued. Conceptually, book value per share is similar to net worth, meaning it is assets minus debt, and. Book value per share formula with calculator financial formulas. Book value per share financial ratio the balance small business. The book value per share is a market value ratio that weighs stockholders equity against shares outstanding. Book value per common share bvps definition investopedia. Its important to use the average number of outstanding shares in this calculation. The pricetobook ratio pb ratio is a ratio used to compare a stocks market value to its book value.