Book Value Per Common Share

AAA

DEFINITION of 'Book Value Per Common Share'

A measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly.

Formula:


Book Value Per Common Share


INVESTOPEDIA EXPLAINS 'Book Value Per Common Share'

Should the company decide to dissolve, the book value per common indicates the dollar value remaining for common shareholders after all assets are liquidated and all debtors are paid.

In simple terms it would be the amount of money that a holder of a common share would get if a company were to liquidate.

VIDEO

Loading the player...
RELATED TERMS
  1. Outstanding Shares

    A company's stock currently held by all its shareholders, including ...
  2. Market Value Of Equity

    The total dollar market value of all of a company's outstanding ...
  3. Tangible Book Value Per Share - ...

    A method of valuing a company on a per-share basis by measuring ...
  4. Book Value Of Equity Per Share ...

    A financial measure that represents a per share assessment of ...
  5. Common Stock

    A security that represents ownership in a corporation. Holders ...
  6. Liquidation

    1. When a business or firm is terminated or bankrupt, its assets ...
RELATED FAQS
  1. How do I use Excel to calculate the book value per common share?

    Book value per common share is a method of stock valuation that allows investors to assess the relative safety of a stock ... Read Full Answer >>
  2. What is the difference between book value per common share and NAV (net asset value)?

    Book value per common share, also known as book value per equity of share or BVPS, is used to evaluate the stock price of ... Read Full Answer >>
  3. Should I care about the book value per common share when dealing with a blue chip ...

    A company's book value per common share is always a useful piece of information, even among seemingly stable equities. The ... Read Full Answer >>
Related Articles
  1. Investing Basics

    Analyze Investments Quickly With Ratios

    Make informed decisions about your investments with these easy equations.
  2. Investing Basics

    Reading The Balance Sheet

    Learn about the components of the statement of financial position and how they relate to each other.
  3. Personal Finance

    Breaking Down The Balance Sheet

    Knowing what the company's financial statements mean will help you to analyze your investments.
  4. Forex Education

    Using The Price-To-Book Ratio To Evaluate Companies

    The P/B ratio can be an easy way to determine a company's value, but it isn't magic!
  5. Investing Basics

    Digging Into Book Value

    This calculation will serve up your portion of the shareholder pie.
  6. Investing Basics

    Liquidation Blues: When Mutual Funds Close

    Underperforming funds often close their doors, leaving investors down and out.
  7. Markets

    Book Value: How Reliable Is It For Investors?

    In theory, a low P/B ratio means you have a cushion against poor performance. In practice, it is much less certain.
  8. Markets

    Investment Valuation Ratios

    Learn about per share data, price/book value ratio, price/cash flow ratio, price/earnings ratio, price/sales ratio, dividend yield and the enterprise multiple.
  9. Markets

    Introduction To Fundamental Analysis

    Learn this easy-to-understand technique of analyzing a company's financial statements and reports.
  10. Charts & Patterns

    Why These Could Be 2015's 10 Best Biotech Stocks

    A quick look at a 10 biotech companies that are poised to deliver for shareholders in 2015.

You May Also Like

Hot Definitions
  1. Fiat Money

    Currency that a government has declared to be legal tender, but is not backed by a physical commodity. The value of fiat ...
  2. Interest Rate Risk

    The risk that an investment's value will change due to a change in the absolute level of interest rates, in the spread between ...
  3. Income Effect

    In the context of economic theory, the income effect is the change in an individual's or economy's income and how that change ...
  4. Price-To-Sales Ratio - PSR

    A valuation ratio that compares a company’s stock price to its revenues. The price-to-sales ratio is an indicator of the ...
  5. Hurdle Rate

    The minimum rate of return on a project or investment required by a manager or investor. In order to compensate for risk, ...
  6. Market Value

    The price an asset would fetch in the marketplace. Market value is also commonly used to refer to the market capitalization ...
Trading Center