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Book value per share shows the accounting value attributable to each common share, based on the company's balance sheet — a useful (though imperfect) reference point for comparing against the market price.
How it works
Enter total shareholder equity, preferred equity, and common shares outstanding. The calculator applies BVPS = (Total Equity − Preferred Equity) ÷ Shares Outstanding.
- Enter total shareholder equity ($).
- Enter preferred equity ($).
- Enter common shares outstanding.
- Click Calculate to see your results.
Examples
A straightforward book value
A company with $5,000,000 of total equity, $500,000 of preferred equity, and 900,000 common shares has a book value per share of $5.00.
Who should use it
- Computing a price-to-book ratio for valuation analysis.
- Balance sheet and equity value review.
Industry applications
- Investment analysis and equity research
- Corporate finance and valuation
Advantages
- Simple, direct calculation from figures already on a balance sheet.
- A useful sanity-check reference point against market price.
Limitations
- Based on historical accounting values, which can diverge significantly from real economic or market value (especially for asset-light, intangible-heavy businesses).
Common mistakes to avoid
- Comparing book value directly to share price without recognizing they measure fundamentally different things (accounting history vs. market expectations).
- Forgetting to subtract preferred equity, which overstates the value attributable to common shareholders.
Best practices
- Use book value per share as one input among several (not a standalone verdict) when assessing whether a stock looks cheap or expensive.
- Compare price-to-book ratios across similar companies rather than judging book value per share in isolation.
Tips
- Book value per share tends to be most meaningful for asset-heavy businesses (like banks or industrials) and less meaningful for asset-light, intangible-driven businesses (like software companies).