Book Value Per Share Calculator

How to Use This Calculator

1. Enter the total shareholders' equity of the company in the first input field (in dollars).
2. Enter the number of common shares outstanding in the second input field.
3. Click the "Calculate" button to compute the book value per share.
4. The result will be displayed in the result section.
5. If you want to start over, click the "Reset" button to clear all inputs.

Understanding Book Value Per Share

Book Value Per Share (BVPS) is a financial metric that indicates the minimum value of a company's equity per share of common stock. It is calculated by dividing the company's total shareholders' equity by the number of outstanding common shares.

Investors use BVPS to assess whether a stock is undervalued or overvalued. If the market price of a stock is below its BVPS, the stock may be considered undervalued. Conversely, if the market price is above its BVPS, the stock may be considered overvalued.

Example Calculation

Suppose a company has a total shareholders' equity of $10,000,000 and 2,000,000 common shares outstanding. The BVPS would be calculated as:

$10,000,000 / 2,000,000 = $5.00 per share

Limitations of Book Value Per Share

While BVPS is a useful metric, it has some limitations:

• It is based on historical cost rather than current market value.
• It does not account for intangible assets like brand value or intellectual property.
• It may not reflect the true economic value of a company.