How to Calculate Book Value (BV) and Book Value Per Share ( BV/S) With Examples ?

What is Book Value (BV) ?

Book Value refers to the worth of a company according to it's Balance Sheet. It is the value of all the assets that a company holds after considering depreciation. 

For example : If a company holds an asset of Rs: 1000 and the depreciation amount is Rs:200. Then its book value will be Rs:800.

How to Calculate Book Value ??

Way 1: Add Share Capital with Other Equity (Reserves) Or Subtracting Liabilities from Assets.

i.e. Book Value = Share Capital + Other Equity ( Reserves )

Or Book Value = Assets - Liabilities

Way 2: As book value is the liquid-able value of assets, and since intangible assets can't be liquidated. Some people take Intangible Assets into consideration.

i.e. Book Value = Total Assets-(Intangible Assets + Total Liabilities)

How to Calculate Book Value Per Share (BV/S) ?

Formula For Calculating BVPS:

Book Value Per Share = (Book Value - Preferred Stock) / No of Shares

What is preferred stock ?

Preferred stock (preferred shares, preference shares) are issued to the preferred shareholders. These are shares of a company with dividends that are paid out to shareholders before common shares dividends are issued. 

And these shareholders has a priority claim on the company’s assets over common shareholders(If the company enters bankruptcy or liquidated). These shareholders are more preferred than the common shareholders and less preferred than the debt shareholders.

Example :