Book Value per Share
Browse all terms in GlossaryDefinition
Book value per share indicates the book value (or accounting value) of each share of stock. Book value is a company's net asset value, which is calculated by total assets minus intangible assets and liabilities. A relatively high book value per share in relation to stock price often occurs when a stock is undervalued.
In the rare circumstance that market price falls below the book value per share, generally a stock is undervalued and might be an attractive buy.
Formula
Book Value per Share = (Shareholders' Equity - Preferred Equity) / Total Outstanding Common Shares
(Note: YCharts approximates using the following formula: Shareholders' Equity / Total Outstanding Common Shares)
