A direct input to this site’s price-to-book ratio calculator — computed here straight from the balance sheet.
How it works
Preferred equity is subtracted from total stockholders’ equity first, since book value per share is specifically a common-shareholder measure. Dividing the remainder by common shares outstanding gives book value per share.
What this does not include
Book value reflects accounting carrying values, not necessarily current market values — assets carried at historical cost can significantly understate or overstate a company’s true economic net worth.
How to use this calculator
- Enter total stockholders’ equity, any preferred equity, and common shares outstanding.
A worked example
Total equity $5,000,000, no preferred equity, 1,000,000 shares outstanding: book value per share = 5,000,000 ÷ 1,000,000 = $5.
What the variables mean
| Variable | Meaning |
|---|---|
| Total equity | Total shareholder equity on the balance sheet |
| Preferred equity | Portion of equity attributable to preferred shareholders, subtracted out first |
| Shares outstanding | Number of common shares in circulation |
Edge cases worth knowing
Preferred equity is subtracted before dividing, not included. Book value per share belongs to common shareholders, so preferred claims on equity have to come out first.
Zero shares outstanding makes the ratio undefined — there’s no share count to divide common equity across.
Frequently asked questions
Why subtract preferred equity first?
Preferred shareholders have a priority claim on equity ahead of common shareholders — book value per share specifically measures what’s left over for common shareholders.
How is book value per share used?
Most commonly as the denominator in the price-to-book ratio, comparing a stock’s market price against this balance-sheet-derived per-share value.
Can book value per share be negative?
Yes, if a company’s liabilities exceed its assets (negative total equity) — a warning sign, though not necessarily disqualifying depending on the business and its growth prospects.
