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Book Value Per Share (BVPS)

Understanding Book Value Per Share (BVPS): Evaluating Shareholder Equity

Book Value Per Share (BVPS) is a financial metric that represents the value of a company's equity per outstanding share. It indicates the amount that shareholders would receive if a company were to liquidate its assets and pay off its liabilities at their book value (accounting value) per share.

BVPS = Shareholders’ Equity / Number of Outstanding Shares


Suppose Company XYZ has the following financial details:


  • Shareholders' Equity: $1,000,000

  • Number of Outstanding Shares: 100,000


To calculate the Book Value Per Share:


  1. Divide shareholders' equity by number of outstanding shares: 1,000,000/100,000=10

A Book Value Per Share of $10 indicates that each share of Company XYZ represents $10 of the company's equity. This metric is used by investors to assess the intrinsic value of a company's stock relative to its market price.

Market Value Ratio

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