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book value formula stock. A lower PB ratio could mean the stock is undervalued. The formula for calculating book value per share is the total common stockholders equity less the preferred stock divided by the number of common shares of the company.
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If you look up any balance sheet you will find that it is divided in 3 sections. Book value per common share or simply book value per share - BVPS is a method to calculate the per-share book value of a company based on common shareholders equity in the company. We start by calculating Company Xs book value by subtracting 2 billion liabilities from 3 billion assets to get a book value of 1 billion.
Suppose the following is an extract from the equity side of the balance sheet of a business.
The book value per share is the minimum cash value of a company and its equity for common shareholders. If you look up any balance sheet you will find that it is divided in 3 sections. The formula for price to book value is the stock price per share divided by the book value per share. A lower PB ratio could mean the stock is undervalued.
