Book Value Per Share

Book value per share (BVPS) takes the ratio of a firm's common equity divided by its number of shares outstanding. Book value of equity per share effectively indicates a firm's net asset value (total assets - total liabilities) on a per-share basis.

How to Use

Book Value Per Share metric can be used by investors to gauge whether a stock price is undervalued by comparing it to the firm's market value per share. If a company’s BVPS is higher than its market value per share (its current stock price) then the stock is considered undervalued. If the firm's BVPS increases, the stock should be perceived as more valuable, and the stock price should increase.