1. What is Book Value Per Share?

Book Value Per Share (BVPS) is a financial ratio that measures the per-share value of a company's equity. It represents the amount of money shareholders would receive if all assets were liquidated and all debts paid.

2. How Does the Calculator Work?

The calculator uses the BVPS formula:

Where:

• \( TA \) — Total Assets ($)
• \( TL \) — Total Liabilities ($)
• \( S \) — Shares Outstanding

Explanation: The formula calculates the net asset value per share by subtracting total liabilities from total assets and dividing by the number of outstanding shares.

3. Importance of BVPS Calculation

Details: BVPS is crucial for investors to assess a company's financial health, compare companies within the same industry, and identify potential undervalued stocks when compared to market price per share.

4. Using the Calculator

Tips: Enter total assets and liabilities in dollars, and number of shares outstanding. All values must be valid (assets ≥ 0, liabilities ≥ 0, shares > 0).

5. Frequently Asked Questions (FAQ)

Q1: What is a good BVPS value?
A: A higher BVPS generally indicates stronger financial position. However, it should be compared with the market price per share and industry averages.

Q2: How often should BVPS be calculated?
A: BVPS should be calculated quarterly when companies release their financial statements to track changes over time.

Q3: What's the difference between book value and market value?
A: Book value is based on accounting records, while market value is determined by stock market prices and investor sentiment.

Q4: Can BVPS be negative?
A: Yes, if total liabilities exceed total assets, resulting in negative shareholder equity and negative BVPS.

Q5: How does BVPS relate to P/B ratio?
A: Price-to-Book (P/B) ratio is calculated by dividing market price per share by BVPS, helping investors assess valuation.