Book value per share bvps overview, formula, example. During the past 10 years, the average book value per share growth rate was 5. Find the latest book value per share for norwegian cruise line holdings ltd nclh. To arrive at this number, subtract liabilities from assets. During the past 3 years, the average book value per share growth rate was 3. Ps can also be determined by dividing the price of a stock per share by per share revenue.
During the past 3 years, the average book value per share growth rate was 2. If a stock is bought at overvalued price levels, its price growth may not match its book value per share growth rate. The book value of a company is the difference between that companys total assets and total liabilities, and not its share price in the market. A simple calculation dividing the companys current stock price by its stated book value per share gives you the pb ratio. What is book value per share and how can it help you in investing. The book value of a company, stripped to basics, is the value of the company the stockholders will own if the firms. Book value per share formula how to calculate bvps. Carter mcbride started writing in 2007 with cmbas ip section.
The book value is essentially the tangible accounting value of a firm compared to the market value that is shown. Pricetobook ratio pb ratio definition investopedia. The number of dividends paid to stockholders versus the companys total net income. The book value per share bvps is calculated by taking the ratio of equity available. Indicated annual dividend % ltdcapital % distribution to net profits. Book value is four times higher than a share price. The price to book ratio formula, sometimes referred to as the market to book ratio, is used to compare a companys net assets available to common shareholders relative to the sale price of its stock. Book value per share is a fairly conservative way to measure a stocks value.
Find the latest book value per share for the hartford financial services group, inc. The pricetobook, or pb ratio, is calculated by dividing a companys stock price by its book value per share, which is defined as its total assets minus any liabilities. Its calculated by dividing the companys stock price per share by its book value per share bvps. Book value per share tells investors what a banks, or any stock s, book value is on a per share basis. Keep in mind that the book value per share will not be the same as the market value per share. Why book value is useful the primary advantage of using book. During the past 3 years, the average book value per share growth rate was 8. Book value per common share bvps definition investopedia. If a pb ratio is less than one, the shares are selling for less than the. 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. Samsung electronics cos book value per share for the quarter that ended in dec. The book value per preferred share is calculated by dividing the call price or par valueplus the cumulative dividends in arrears by the number of outstanding preferred shares. The formula for price to book value is the stock price per share divided by the book value per share. Stocks trading below their book value can give decent.
Book value per share of common stock is the amount of net assets that each share of common stock represents. Book value of equity per share effectively indicates a firms net asset value. During the past 5 years, the average book value per share growth rate was 2. The market price per share of stock usually termed simply share price is the dollar amount that investors are willing to pay for one share of a companys stock. Total shareholders equity common shares outstanding. This makes sense because equity represents the net assets of a business. Book value per share is usually used to compute the value or price per share of a companys stock during liquidation. When compared to the current market value per share, the book value per share can provide information on how a. If the investors can find out the book value of common stocks, she would be able to figure out whether the market value of the share is worth.
Norwegian cruise line holdings ltd nclh book value per. How to calculate book value per share of common stock. Book value per share bvps is a measure of value of a companys common share based on book value of the shareholders equity of the company. But does this in itself make the stock a good investment. It is not advisable to buy a share where book value per share is 4 times greater than the current market price per share.
Find the latest book value per share for amazoncom inc amzn. Book value per share bvps takes the ratio of a firms common equity. During the past 5 years, the average book value per share growth rate was 14. Divide the available equity by the common shares outstanding to determine the book value per share of common stock. Some stockholders have keen interest in knowing the book value of the shares they own. At the same time, we use book value in the case of. Exxon mobils book value per share for the quarter that ended in dec. An assets book value is equal to its carrying value on the balance sheet, and companies. Book value per share is a widely used stock evaluation measure. When book value is divided by the number of outstanding shares, we get the book value per share bvps which can be used to make a per share comparison. What is book value per share and how can it help you in.
Enterprise value, or firm value, market value, market capitalization, and other. Generally, for value investors, pb ratios carry a great significance, as we like the price of a stock to be well supported by the value on the books. In other words, divide the applicable equity by the number of shares. During the past 5 years, the average book value per share growth rate was 41. Price to book value is a valuation ratio that is measured by stock price book value per share. Depreciation is the reduction of an items value over time. In other words, the value of all shares divided by the number of shares issued. During the past 5 years, the average book value per share growth rate was 6. When book value is divided by the number of outstanding shares, we get the book value per share bvps which can be used to make a per. Book value of an asset refers to the value of an asset when depreciation is accounted for. An assets book value is equal to its carrying value.
How to figure the book value of bank stock finance zacks. Book value per share formula with calculator financial formulas. 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. In these cases, the stock can be priced way above the book value per share of the company. If a corporation does not have preferred stock outstanding, the book value per share of stock is a corporations total amount of stockholders equity divided by the. At inside value, we generally look for companies that have been increasing book value per share over a number of years because as fords plight shows the share price often follows the book. How to calculate the book value of a preferred stock. This compares a stock s book value to its market value. If there is preferred stock outstanding, in the book value per share calculation above,the numerator will need to be adjusted by the value of the preferred stock outstanding to get the stock holders equity.
During the past 3 years, the average book value per share growth rate was 41. Book value per share bvps takes the ratio of a firms common equity divided by its number of shares outstanding. In other words, the value of all shares divided by. The book value per share formula is used to calculate the per share value of a.
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. It is the amount that shareholders would receive if the company dissolves, realizes cash equal to the book value of its assets and pays liabilities at their book value. If all of the assets were sold off and all of the liabilities were paid off, the shareholders would be left with the equity. It has no specific relation to the value of the companys assets, such as book value per share does, which is based on the information from a companys balance sheet. Price 52week low % chg in price from 52week high % chg in price from 52week low. The book value per share bvps is calculated by taking the ratio of equity available to common stockholders against the number of shares outstanding. Find the latest book value per share for johnson johnson jnj. Qualcomms book value per share for the quarter that ended in mar. Book value per share financial definition of book value. A companys book value of equity per share bvps is the minimum value of its equity and is found by dividing total common stock by the number of the companys outstanding shares.
Often, book value is expressed on a pershare basis, dividing the total shareholder equity by the number of shares of stock outstanding. The book value of a share of preferred stock is its call price plus any dividends in arrears. Occidental petroleums book value per share for the quarter that ended in mar. Book value per share formula above assumes common stock only. Book value per share financial ratio the balance small business. If the price tobook value per share is less than one, it means the stock is trading below its book value. When compared to the current market value per share, the book value per. The book value per share is a market value ratio that weighs stockholders equity against shares outstanding. Comparing the stock price to the book value per share is done using the pb ratio, or price to book ratio. During the past 5 years, the average book value per share growth rate was 8. Hence, the rule of thumb of buying stocks at a price of 1. When book value is divided by the number of outstanding shares, we get the book value per share bvps which can be used to make a pershare comparison.
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