Accounting
Advanced

Book Value per Share

The net asset value backing each common share.

Formula

BVPS=Equity−PreferredShares OutstandingBVPS = \dfrac{Equity - Preferred}{Shares\ Outstanding}

Variables

BVPSBook value per share
EquityTotal equity
PreferredPreferred equity
SharesCommon shares outstanding

Example

($200k − $0) / 100k shares = $2.00

Did You Know?

When a stock trades below its book value per share, value investors take a closer look for bargains.

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