Financial Terms / book value

What is Book Value?

Book value is a valuable tool for investors to assess the true value of a company. It is calculated by netting an asset against its accumulated depreciation and subtracting its liabilities, and can also be used to calculate a company's per-share book value and P/B ratio.

How do I calculate the book value?

In order to calculate Book value, you should subtract the accumulated depreciation of a company's assets from the asset's original cost. This calculation is also known as the net asset value of a company. The result is the Book value. This value may be lower than the market value of the asset or company. To further assess the value of the company, you can use the Book value per share (BVPS). Create a new blank spreadsheet and label the columns as "Total Equity" and "Number of Shares."
In the "Total Equity" column, list the total equity value of the company. This includes the sum of common stock, retained earnings, and any other equity components. Each equity item should be listed in a separate row.
In the adjacent column, assign a value to each equity item.
Use the appropriate formula to calculate the total equity. This could be a simple addition of the equity values or a more complex formula depending on the structure of your data.
In the "Number of Shares" column, list the total number of shares outstanding for the company.
Assign a value to each row representing the number of shares for the corresponding equity item.
Calculate the sum of the total number of shares using the appropriate formula.
Divide the total equity value by the total number of shares to calculate the Book Value Per Share (BVPS). Use the appropriate formula to perform this calculation. For example, if the total equity is in cell A2 and the total number of shares is in cell B2, enter "=A2/B2" in a new cell to calculate BVPS.
Format the resulting BVPS cell as desired, including decimal places or currency symbols, for better presentation. Any of these metrics can be calculated using Sourcetable.

What is book value?

Book value is the accounting value of a company's assets. It is equal to the cost of carrying an asset on a company's balance sheet minus the accumulated depreciation.

What is book value per share?

Book value per share is a way to calculate the per-share book value of a company. It is calculated by dividing the net asset value of the company by the number of shares outstanding.

What is the formula for calculating book value per share?

The formula for calculating book value per share is Book Value per Share = Net Asset Value / Number of Shares Outstanding.

Key Points

Book Value is the Net Value of a Company's Assets
Book value is the total value of a company's assets after deducting liabilities, as reported on its balance sheet. This value is an important factor used to help determine the fair value of a company.
Book Value is Roughly Equal to What Shareholders Would Receive in a Liquidation
Book value is the amount of money that shareholders would receive if the company were to be liquidated. This is an important factor to consider when evaluating the potential value of a company.
Book Value is the Difference between Assets and Liabilities
Book value is the difference between a company's total assets and total liabilities. This amount is used to determine the value of the company's assets and liabilities, and to help investors make informed decisions about investing in a company.
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