It is calculated once per day at the end of the trading day and functions as the share price of the mutual fund for the next trading day. Book value of equity per share effectively indicates a firms net asset value total assets total liabilities on a pershare basis. So youd think id be a big believer in the importance of book value. When the purchase price per share is less than book value per share, then the denominator of book value per share decreases by a greater percentage than does the numerator, and book value per share increases. The book value of a company divided by the number of shares outstanding. Book value per share bvps is a ratio used to compare a firms common shareholders equity to the number of shares outstanding. Adjusted assets, tangible equity capital, adjusted. Book value per share is a widely used stock evaluation measure. Book value per share how is book value per share abbreviated. Price to book value is a valuation ratio that is measured by stock price book value per share. Ratios that are designed to measure the relative claims of stockholders to earnings cash flow per share, and equity book value per share of a firm. Pb ratios below 1 indicate that a company could be undervalued with. 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.
In other words, the value of all shares divided by the number of shares issued. It is the amount that shareholders would receive if the company dissolves, realizes cash equal to the. The book value of equity per share is a financial measure which indicates a per share estimation of the minimum value of an entitys equity. Book value per share the ratio of stockholder equity to the average number of common shares. Book value per share financial definition of book value. Nna navios maritime acquisition stock price, forecast.
Dividing this by the number of shares will give the book value per share. Book value per share is the gaap number number of shares outstanding. A relatively high book value per share in relation to stock price. Book value is calculated by totaling the companys assets, subtracting all debts, liabilities, and the liquidation price of preferred stock, then dividing the result by the number of outstanding shares of common stock. Strictly speaking, the higher the book value, the more the share is worth. So in absolute terms, book value is the net assets of the company. So higher book value means the shares have more liquidation value. The book value per preferred share is a financial ratio that calculates amount of equity applicable to each outstanding preferred stock. Alibaba group holding limited baba book value per share. This compares a stocks book value to its market value. Detailed price information for national bank of canada nat from the globe and mail including charting and trades.
Annual and quarterly earnings per share figures on the value line page exclude nonrecurring or onetime gains and losses, which are. In the case of a mutual fund, this is the per share prorated value of the securities underlying the fund. Book value common equity per share, defined as the common shareholders. Book value is a companys net asset value, which is calculated by total assets minus intangible assets and liabilities. Peterkort and nielsen 2005 find an inverse relation between average stock returns and the booktomarket ratio in firms with a negative book value of equity i. The pricetobook ratio measures a companys market price in relation to. An accounting term that measures the intrinsic value of a single share of a companys stock. It is a valuation metric that sets the floor for stock prices under a.
The number of dividends paid to stockholders versus the companys total net income. Book value is the net asset value of the company according to standard accounting practice gaap, audited. Vanguard ftse allworld ucits etf vanguard global sites. Find out all the key statistics for cabot corporation cbt, including valuation measures, fiscal year financial statistics, trading record, share statistics and more. How do i interpret pricebook and book value per share on. Although the book value of equity per share is a factor that can be used by the investors to determine the value of stock, it presents only a limited value of the firms situation. Net asset value per share financial definition of net. A low pb ratio is commonly taken to indicate value whilst a high pb ratio is taken to indicate a growth stock. Common shares outstandingactual, 36,618,729, 36,874,055, 29,927,746, 29,954,931, 29,975,439. Ps can also be determined by dividing the price of a stock per share by pershare revenue. A tangible book value per share tbvps is a method of valuing a company on a pershare basis by measuring its equity after removing any.
The book value per share is the amount of the assets that will go to common equity in the event of liquidation. Equity per share represents the netasset value backing up each. Book value per share is a reliable barometer of a stocks potential value. Book value of an asset refers to the value of an asset when depreciation is accounted for. Book value per share meaning is a very vital concept here.
Pricetobook ratio pb ratio definition investopedia. Book value per share, quasireorganization flashcards. Book value per share the book value of a company divided by the number of shares outstanding book value per share book value per share indicates the book value or accounting value of each share of stock. Computing the book value of preferred stock is slightly different than computing common stocks value because preferred. Book value legal definition of book value legal dictionary. In business, the book value of an asset is the value it is given in the account books of. Book value per share formula above assumes common stock only. The equity is bumped up by the exercise price of the options, warrants or preferred shares. Provider as that term is defined in the policies of the tsx venture exchange. If the market value per share is lower than the book value per share, then the stock price may be undervalued. Depreciation is the reduction of an items value over time.
In depth view into aapl book value per share explanation, calculation, historical data. Then it is divided by the number of shares that has been increased by those added. This is a percentage of the current price of a share. During the past 3 years, the average book value per share growth rate was. 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. The classification is determined by comparing a companys pricetobook ratio to the median. Estimated percentage of the price to book value per common share. It is calculated by dividing the total net asset value of the fund or company by the number of shares outstanding and is also known as book value per share. The calculation of book value is important in determining the value of a company that is being liquidated. When the canadian market tanked, company insiders took an unusual step.
It should be clear that there is no direct connection between bv and market value. National bank of canada nat quote the globe and mail. In other words, this is the equity value of each preferred stock outstanding. 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 microsoft corporation msft. Net asset value per share the expression of the value of a company or fund per share. Book value is the total amount of companys physical assets excluding patents, goodwill minus liabilities. Movements in currency exchange rates can adversely affect the return of your investment.
Often, book value is expressed on a pershare basis, dividing the total shareholder equity by the number of shares of stock outstanding. Also, the book value of an asset is the amount reported in a businesss most recent balance sheet. Theoretically, the company can sell all its assets and pay off all its debt and liabilities. Outstanding shares refer to a companys stock currently held by all its shareholders, including share blocks held by institutional investors and restricted shares. The book value is essentially the tangible accounting value of a firm compared to the market value that is shown. One way to look at book value per share is to consider what will happen if the company ceases all operations today. What is book value per share and how can it help you in. This interpretation is simplistic and deeper analysis is recommended. The book value per share is a market value ratio that weighs stockholders equity against shares outstanding. Book value per share definition the book value per share is the value each share would be worth if the company were to be liquidated, all the bills paid, and the assets distributed. Find the latest book value per share for amazoncom inc amzn.
Therefore, book value per share book value shares outstanding. Thats been supportive to the market as a whole, since when companies reduce their outstanding share count by repurchasing units, it lifts the pershare value of the remaining stock. Book value per common share book value per common share is the net assets available to common stockholders divided by the shares outstanding, where net assets represent stockholders equity less preferred stock. Book value per common share is a measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. As book value and market value used so often as investment term, there can be confusion. Stocks trading below their book value can give decent. View book value per share for aon access over 100 stock metrics like beta, evebitda, pe10, free cash flow yield, kz index and cash conversion cycle. Indian stock market the book value is per share value i. During the past 5 years, the average book value per share growth rate was. What remains is the equity that is distributable to its shareholders.
Nada blue book values for used cars, certified preowned cars and more, brought to you by the national automobile dealers association. Should the company dissolve, the book value per common share indicates the dollar value remaining for common shareholders. Book value per share can separate the wheat from the chaff on a stock but it needs to be applied correctly. Book value of equity per share bvps financial analysis. Net asset value per share navps is an expression for net asset value that represents the value per share of a mutual fund, an exchangetraded fund etf, or a closedend fund. Is it better to buy a company with a lower book value. Find the latest book value per share for alibaba group holding limited baba. Book value per common share bvps definition investopedia. In the case that the firm dissolves, it is the amount the shareholders will receive. It relates the market price of a stock to its book value. When a company has losses and the total of those losses exceed the total profits in profitable periods and this total loss is greater than the paid in capital meaning that they have borrowed money. It is calculated by the company as shareholders equity book value divided by the number of shares outstanding. Book value per share stock market definition,meaning.
Lower liquidity means there are insufficient buyers or sellers to allow the fund. The price to book pb ratio is used to compare a companys market price to book value and is calculated by dividing price per share by book value per share. 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. Book value per share should not be thought of as an indicator of economic worth, since it reflects accounting valuation and not necessarily market valuation. Book value per share compares the amount of stockholders equity to the number of shares outstanding. In this equation, book value per share is calculated as follows. Book value per share bvps overview, formula, example. Relating book value per share to market price a favoured tool of value investors is the pb ratio. 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. Thus, this measure is a possible indicator of the value of a companys stock. Book value is used in the financial ratio pricebook.