Meaning and calculation
Keep total equity, common equity and book value per share separate: they answer different questions.
assets − liabilities
Source references: FINRA: Defining the Value of an Investment
A hypothetical worked example
Hypothetical: USD 150 million of assets minus USD 90 million of liabilities leaves USD 60 million of equity. Assuming no preferred equity, dividing by 5 million common shares gives USD 12 per share.
What can make this comparison misleading?
Book value per share reflects historical accounting balance-sheet entries, not real-world liquidation recovery or open-market stock valuation.
For common equity, remove claims that belong to preferred holders or noncontrolling interests where relevant to the reported equity subtotal. Use a common-share denominator from a matching date. A negative book value does not produce a useful conventional P/B comparison.
What to record beside the number
- The filing URL, document section and issuer identity.
- The reporting period, currency, units and whether the figure is reported or calculated.
- The exact formula and any missing inputs or differences in definitions.
Sources & corrections
Prepared with AI assistance and automated source and calculation checks. No independent human analyst review is claimed. Hypothetical examples and historical data are identified in the text.
Use the linked primary sources to check definitions and company disclosures. Filings and service details can change; verify the relevant period before relying on a figure.
Found an error? Send a correction with the page, the claim and a supporting source. These guides provide general education; they do not assess your financial circumstances or recommend a trade. Read our research disclosures.