Tangible Book Value Per Share
Tangible Book Value Per Share (TBVPS) is the portion of tangible assets on a company's balance sheet attributable to each share of common stock.
Tangible book value excludes:
- Items classified as "Intangible Assets" on the balance sheet
Tangible Book Value Per Share is used to illustrate how under/overvalued a company is. If a company was to file bankruptcy, the tangible value of the company would be what is left after bankruptcy. Tangible Book Value Per Share answers the question "as a common stock shareholder, what would I receive for the company if it had to liquidate its assets?"
A TBVPS greater than the current share price means the stock is potentially undervalued.
Tangible Book Value Per Share = (Tangible Book Value - Book Value of Preferred Stock)/Common Shares Outstanding