P/B ratio shows the relationship between a company’s market capitalisation and its book value. Book value per share is a financial metric that calculates the per-share value of a company based on its balance sheet. It represents the net worth of a company and provides what are some examples of investing activities insight into the value that each share of stock holds. The market rate of a company’s stock defines the price a shareholder is willing to pay for a company’s shares. On the other hand the book value per common share shows the real value of a company’s stock.

  1. One of the most frequent ratios tracked by value investors is the Price / Book ratio, which measures a company’s market value versus its book value.
  2. The Book Value per Common Share Calculator allows you to calculate the per-share value of a company based on common shareholders’ equity in a company.
  3. To get the book value, you must subtract all those liabilities from the company’s total assets.
  4. Comparing the book value per share of a company with its market value per share helps investors measure its true value.
  5. An investor looking to make a book value play has to be aware of any claims on the assets, especially if the company is a bankruptcy candidate.

Methods to Increase the Book Value Per Share

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Accounting Calculators