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book value formula stock. Suppose the following is an extract from the equity side of the balance sheet of a business. From the balance sheet extract we can see that the total book value of common equity is 49500.
The book value figure is typically viewed in relation to the companys stock value market capitalization and is determined by taking the total value of a companys assets and subtracting any of the liabilities the company still owes. The formula for price to book value is the stock price per share divided by the book value per share. Book Value of Equity Formula It is calculated by adding the owners capital contribution treasury shares retained earnings and accumulated other incomes.
Below is the Book Value Formula.
If you look up any balance sheet you will find that it is divided in 3 sections. The book value calculation in practice is even simpler. PB Ratio dfrac MarketPriceperShare BookValueperShare P B Ratio B ook V alue per S hareM arket P rice per S hare. Book Value per Share Total Common Stockholders Equity Preferred Stock Number of Common Shares.