Book Value Per Share Example Let’s say that Company A has $12 million in stockholders’ equity, $2 million of preferred stock, and an average of 2,500,000 shares outstanding. You can use the book value per share formula to help calculate the book value per share of the company. ...
Book value per share (BVPS) is a measure of value of a company's common share based on book value of the shareholders' equity of the company. It is the amount that shareholders would receive if the company dissolves, realizes cash equal to the book value of its assets and pays ...
Market Value Per Share vs. Book Value Per Share The calculation for BVPS uses historical costs and isfrequently done using software such as Excel. However, themarket valueper share—a forward-looking metric—accounts for a company's futureearning power. As a company’s potential profitability, o...
A company can also increase the book value per share by using the generated profits to buy more assets or reduce liabilities. For example, if ABC Limited generates $1 million in earnings during the year and uses $300,000 to purchase more assets for the company, it will increase the common...
Book Value Per Share = ($50,000,000 - $10,000,000) / 5,000,000 Book Value Per Share for company A = $8 per share One popular example is that of the famous denim brand, Levi Strauss, whose total shareholders’ equity stood at $1434 million in May 2021, and a weighted average s...
In this example, the Price-to-Book (P/B) ratio for ABC Enterprises is 1.5. This means that the market price of the company’s shares is 1.5 times higher than its book value per share. Investors can use this ratio to assess whether the stock is trading at a premium (P/B ratio ...
The price-to-book ratio is simple to calculate. Just divide the market price per share by the book value per share. P/B Ratio = Market Share Price / Book Value Per Share In the previous example, the BVPS was $10.50. So, if the company's shares had a current market value of $13.17...
Book Value Per Share Calculation Example (BVPS) What is Book Value Per Share? The Book Value Per Share (BVPS) is the per-share value of equity on an accrual accounting basis that belongs to the common shareholders of a company. How to Calculate Book Value Per Share (BVPS) The book value...
In this example, the book value per share for Company XYZ is $10. It’s important to note that book value per share is a historical measure and is based on the balance sheet values at a specific point in time. As a result, it may not reflect the current market value or future earni...
Example of Book Value per Share of Stock If a corporation without preferred stock has stockholders’ equity on December 31 of $12,421,000 and it has 1,000,000 shares of common stock outstanding on that date, the book value per share of common stock is $12.42. This book value is likely...