Book Value: What Is It & How To Calculate
Content
- What is a good book value per share?
- Why Understand Book Value of Equity Per Share?
- Motley Fool Investing Philosophy
- Price-to-Book Ratio
The figure is determined using historical company data and isn’t typically a subjective figure. It means that investors and market analysts get a reasonable idea of the company’s worth. For example, intangible factors affect the value of a company’s shares and are left out when calculating the BVPS. A company can also increase the book value per share by using the generated profits to buy more assets or reduce liabilities. The book value is used as an indicator of the value of a company’s stock, and it can be used to predict the possible market price of a share at a given time in the future. Book value is the accounting value of a company’s assets less liabilities. In other words, it is the expected value that a firm can expect if it were to sell all of the assets on its balance sheet and cover its outstanding debts and obligations.