Jun 10, 2018 0 Comments

Book Value per Share Calculator is a tool to compute the difference between total assets and total liabilities

- Book Value Per Share:
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Background Information

- What does Book Value per Share mean?
- Book value per share is just one of the methods for comparison in valuing of a company. Market value, market capitalization, Enterprise value, or firm value, and other methods may be used in different circumstances or compared to one another for contrast. 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.

- Formula
- Book Value Per Share = (Total common stockholders’ equity - Preferred stock) / Number of common shares

- Example
‘ABC’ a company has the following information:-

- Total assets at the end of the year = $150,000
- Total liabilities at the end of the year = $80,000
- Preferred Stock = $20,000
- Number of common shares = 2000 shares
- Now let’s calculate the Shareholders’ Equity first;
- Shareholders’ Equity = Total Assets – Total Liabilities
- Or, $150,000 – $80,000 = $70,000.

According to the formula, Book Value Per Share is:-

- = ($70,000 - $20,000)/ 2000
- Therefore, Book value per share
- = $50,000 / 2000
- = $25 per share

- Jun 10, 2018
- Tool Launched

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