Book Value Of Equity Per Share - BVPS

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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)

 

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BREAKING DOWN '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.

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RELATED FAQS
  1. What Book Value Of Equity Per Share (BVPS) ratio indicates a buy signal?

    Book value of equity per share (BVPS) is a ratio used in fundamental analysis to compare the amount of a company's shareholders' ... Read Full Answer >>
  2. How can you calculate Book Value Of Equity Per Share (BVPS) in Excel?

    The book value of equity per share (BVPS) measures a stock's valuation that allows investors to assess the financial health ... Read Full Answer >>
  3. What is the difference between carrying value per share and earnings per share?

    Carrying value per share, more commonly referred to as book value of equity per share or BVPS, and earnings per share, or ... Read Full Answer >>
  4. What does it mean if a share's market value is significantly higher than its book ...

    If a share’s market value is significantly higher than its book value per common share, this usually indicates investors ... Read Full Answer >>
  5. What's the difference between book and market value?

    Book value is the price paid for a particular asset. This price never changes so long as you own the asset. On the other ... Read Full Answer >>
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    Since the fixed charge coverage ratio indicates the number of times a company is capable of making its fixed charge payments ... Read Full Answer >>

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