Search Investopedia

Book Value Of Equity Per Share - BVPS

Filed Under »
Dictionary Says

Definition of 'Book Value Of Equity Per Share - BVPS'

A financial measure that represents a per share assessment of the minimum value of  a company's equity. More specifically, this value is determined by relating the original value of a firm's common stock adjusted for any outflow (dividends and stock buybacks) and inflow (retained earnings) modifiers to the amount of shares outstanding.

Calculated as:
Book Value Of Equity Per Share (BVPS)
Investopedia Says

Investopedia explains 'Book Value Of Equity Per Share - BVPS'

While book value of equity per share is one factor that investors can use to determine whether a stock is undervalued, this metric should not be used by itself as it only presents a very limited view of the firm's situation. BVPS provides a snap shot of a firm's current situation, but considerations of the firm's future are not included.

For example, XYZ Corp, a widget producing company, may have a share price that is currently lower than its BVPS. This may not indicate that the XYZ is undervalued, because looking ahead, the growth opportunities for the company are vastly limited as fewer and fewer people are buying widgets.

Related Definitions

  •

    Book Value

    1. The value at which an asset is carried on a balance sheet. To calculate, take the cost of an asset minus the accumulated depreciation.2. The net asset value of a company, calculated ...
    Read More »

  • Market Value

    1. The current quoted price at which investors buy or sell a share of common stock or a bond at a given time. Also known as "market price".2. The market capitalization plus the market ...
    Read More »

  • Intrinsic Value

    1. The actual value of a company or an asset based on an underlying perception of its true value including all aspects of the business, in terms of both tangible and intangible factors. ...
    Read More »

    • Dividend

      1. A distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders. The dividend is most often quoted in terms of the dollar amount ...
      Read More »

    • Buyback

      The repurchase of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buy back shares either to increase the value of ...
      Read More »

    • Tangible Book Value Per Share - TBVPS

      A method of valuing a company on a per-share basis by measuring its equity after removing any intangible assets. The tangible book value per share is calculated as follows:
      Read More »

    • Market Value Of Equity

      The total dollar market value of all of a company's outstanding shares. Market value of equity is calculated by multiplying the company's current stock price by its number of outstanding ...
      Read More »

Articles Of Interest

Sponsored links
Hot Definitions
Partner Links
Suggested Definitions