Definition – What is the Book Value per Share?
Book value per share is used as an indication of the underlying value of a company compared with the current trading price of the company’s stock.
Formula – How to calculate book value per share?
Book Value per Share = Company Book Value / Total Shares Outstanding
A company has a book value of $5,000 and 3,000 shares outstanding.
Book Value per Share = $5,000 / 3,000 shares = $1.667 per share
Therefore, this company’s book value is $1.667 per share.
Sources and more resources
- Accounting Tools – Book value per share – A quick explanation and example of how to calculate book value per share.
- Investopedia – Book Value per Common Share & Book Value of Equity per Share – Some example calculations on book value per share.
- Finance Formulas – Book Value per Share – The formula for book value per share.
- The Balance SMB – Learn the definition and importance of the Book Value per Share – An explanation of book value per share.