What is Book Value per Share (BVPS)?
Book value per share (BVPS) shows how much common shareholders’ equity is assigned to each outstanding common share after liabilities and preferred capital are covered.
It’s an accounting-based value anchor used to assess downside protection, balance-sheet strength, and whether the market is paying a premium or discount to net asset value.
Formulas
then we have Tangible BVPS
Example
Suppose a company reports:
- Total shareholders’ equity: $5,000,000
- Preferred equity: $500,000
- Intangible assets & goodwill: $0
- Common shares outstanding: 1,000,000
Common equity = $5,000,000 − $500,000 = $4,500,000
- BVPS = $4.50 per share
- Tangible BVPS = $4.50 per share
If the stock trades at $3.20, the market is valuing it below book value; a price far above $4.50 implies investors expect stronger earnings power or franchise value.