A lower price per book value provides a higher margin of safety. How to Calculate Book Value from a Balance Sheet Look at any company balance sheet which is a snapshot of the companys finances. This means the total value of its assets not including intangible assets with no immediate cash value such as goodwill.
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.
To calculate the book value of a company subtract the dollar value of the companys preferred stock from its shareholders equity. The book value of a company is simply its assets minus its liabilities. NBV is calculated using the assets original cost how much it cost to acquire the asset with the depreciation depletion or amortization of the asset being subtracted from the assets original cost. The book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders.