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Book Value Per Share (BVPS

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### Value Investing Principles: Book Value vs. Tangible Book Value Pioneered by Benjamin Graham and David Dodd in *Security Analysis*: - **BVPS (Book Value Per Share)**: Measures the net accountin...

Reviewed by Noman Khan · MBA
Last updated:
Editorial Guidelines

⚙ Input Values

📊 Results

Primary BVPS & P/B Multiple Summary
BVPS: $28.33/share (P/B: 1.27x) | TBVPS: $22.67/share (P/TBV: 1.59x) ➔ Common Equity: $425M
Book Value Per Share (BVPS in $ / share)
$28.33 / share (Common Equity / Shares)
Tangible Book Value Per Share (TBVPS in $ / share)
$22.67 / share (Physical Net Assets / Shares)
Price-to-Book Ratio (P/B Multiple)
1.27x Price / Book (P/B)
Price-to-Tangible Book Ratio (P/TBV Multiple)
1.59x Price / Tangible Book (P/TBV)
Net Common Stockholders' Equity ($)
$425,000,000 ($425.00M)
Net Tangible Common Equity ($)
$340,000,000 ($340.00M)
✦ Benjamin Graham Balance Sheet & Value Diagnostic
Balance Sheet Book Value (BVPS & TBVPS) Analysis: For a company with $450.0M in total equity and 15.0M shares trading at $36.00/share: [1. Book Value Per Share]: Deducting $25.0M in preferred claims leaves **$425,000,000 in Common Equity**, delivering a **Book Value Per Share (BVPS) of $28.33** (Price-to-Book: **1.27x**). [2. Tangible Book Value]: Stripping out $85.0M in goodwill and intangible assets leaves $340,000,000 in physical net assets, establishing a **Tangible BVPS (TBVPS) of $22.67** (Price-to-Tangible-Book: **1.59x**). [3. Value Investing Assessment]: FAIRLY VALUED BALANCE SHEET (P/B = 1.27x): Healthy multiple typical for commercial banks, insurance companies, and capital-intensive industrials.
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📐 Formula

Book Value Per Share (BVPS), Tangible BVPS & P/B equations: Common Equity = Total Stockholders' Equity - Preferred Stock Claims Value Per Share (BVPS) = Net Common EquityDiluted Shares Outstanding Tangible Common Equity = Net Common Equity - Goodwill & Intangible Assets Book Value Per Share (TBVPS) = Net Tangible Common EquityDiluted Shares Outstanding -to-Book Ratio (P/B) = Stock PriceBVPS, Price-to-Tangible-Book (P/TBV) = Stock PriceTBVPS

💡 Practical Example

✅

For example, evaluating a regional bank with $450M total equity, $25M preferred stock, $85M goodwill/intangibles, and 15.0M shares trading at $36.00: Common Equity is \, P/B = 1.27x). Tangible Equity is \, P/TBV = 1.59x).

📖 About Book Value Per Share (BVPS

Value Investing Principles: Book Value vs. Tangible Book Value

Pioneered by Benjamin Graham and David Dodd in Security Analysis:

  • BVPS (Book Value Per Share): Measures the net accounting worth of the company per common share if all assets were liquidated at stated balance sheet values and all liabilities retired.
  • TBVPS (Tangible BVPS): The ultimate liquidation backstop; it deducts intangible assets (brand names, patents, acquisition goodwill) that may become worthless in insolvency, providing a hard physical asset safety floor (especially critical for financial institutions and banks).

How to Use This Calculator

Enter your Total Stockholders' Equity ( on Balance Sheet) (e.g. 450000000 (Total Assets minus Total Liabilities)), Preferred Stock & Preferred Dividend Claims () (e.g. 25000000), Goodwill & Identifiable Intangible Assets () (e.g. 85000000 (for Tangible Book Value TBVPS)), Diluted Common Shares Outstanding (Count) (e.g. 15000000), and Current Stock Market Price ( / share) [for P/B Ratio] (e.g. 36.00). Results update instantly as you type — no submit button or page reload required. Adjust any value to compare scenarios side by side.

The Formula

Book Value Per Share (BVPS), Tangible BVPS & P/B equations: Common Equity = Total Stockholders' Equity - Preferred Stock Claims Value Per Share (BVPS) = (Net Common Equity) / (Diluted Shares Outstanding) Tangible Common Equity = Net Common Equity - Goodwill \& Intangible Assets Book Value Per Share (TBVPS) = (Net Tangible Common Equity) / (Diluted Shares Outstanding)-to-Book Ratio (P/B) = (Stock Price) / (BVPS), Price-to-Tangible-Book (P/TBV) = (Stock Price) / (TBVPS)

Worked Example

For example, evaluating a regional bank with 450M total equity, 25M preferred stock, 85M goodwill/intangibles, and 15.0M shares trading at 36.00: Common Equity is P/B = 1.27x). Tangible Equity is P/TBV = 1.59x).

Understanding Your Result

The S&P 500 long-run average P/E ratio is approximately 15–17× trailing earnings. P/E ratios significantly above 25× imply high growth expectations that must materialize for the valuation to hold. EPS growth of 10–15% annually over 5+ years is considered excellent for established companies; below 5% may suggest a value trap. Price-to-book (P/B) below 1.0 can indicate undervaluation or distress — research the balance sheet composition before interpreting low P/B as cheap.

💡 Financial Planning: Expert Principles & Risk Awareness

  • All calculations assume fixed rates and idealized conditions. Real-world results vary due to market volatility, inflation, fees, and taxes.
  • The Consumer Financial Protection Bureau (CFPB) recommends consulting a certified financial planner (CFP) for decisions involving significant sums.
  • Run at least three scenarios: optimistic, pessimistic, and most-likely — to understand the full range of potential outcomes before committing.
  • Inflation averages 2–3% annually in the US (Federal Reserve target). Long-term projections that ignore inflation significantly overstate future purchasing power.
  • Tax treatment varies widely by account type (IRA, 401k, brokerage), jurisdiction, and income level. Verify tax implications with a CPA before acting.
  • Compound interest works for you in savings/investments and against you in debt. The difference of even 1% in rate, sustained over decades, is enormous.
  • Emergency funds (3–6 months of expenses) should be established before optimizing for returns — financial security precedes financial growth.
  • Financial projections older than 12 months should be recalculated. Interest rates, tax brackets, and market conditions shift materially year to year.
Sources: CFPB Financial Tools · IRS Tax Information · Federal Reserve Data

Results are for informational and educational purposes only. Always verify critical decisions with a qualified professional.

❓ Frequently Asked Questions

What is Book Value Per Share (BVPS)?
BVPS measures the accounting equity value belonging to each common share: BVPS = (Total Stockholders' Equity - Preferred Equity) ÷ Diluted Shares Outstanding.

What is Tangible Book Value Per Share (TBVPS)?
TBVPS subtracts intangible assets and goodwill from common equity before dividing by shares, measuring the hard physical net asset backing per share.

What does a Price-to-Book ratio under 1.0 indicate?
A P/B ratio below 1.0 means the stock is trading at a discount to its stated net asset value, often signaling either a deep value opportunity or severe market skepticism about asset write-downs.

Why is P/B ratio not useful for asset-light software companies?
Software and tech companies derive their value from intellectual property and software code, which GAAP expensing rules do not capitalize onto the balance sheet as physical assets.

Why is Tangible Book Value crucial for evaluating banks?
Regulators and institutional investors evaluate bank capital strength (CET1 ratios) using Tangible Common Equity to ensure the bank can absorb loan losses without relying on unrecoverable goodwill.

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