Book value per share

What is Book value per share?

Book value per share shows a company's book value per every common share outstanding to the fiscal period end. Book value (also known as Net asset value) represents the difference between total assets and total liabilities, excluding preferred stock equity (because preferred shareholders have higher rights on assets and earnings than common shareholders).


Book value per share = Total common equity / Total common shares outstanding

What does Book value per share mean?

In case of the company liquidation, the book value per share shows the monetary value remaining for common shareholders after all assets are sold and all debt is paid. If a company’s Book value per share is higher than a market price of its share, then the stock may be considered undervalued.