How Do You Spell BOOK VALUE PER SHARE?

Book Value Per Share is a financial measure that indicates the net worth of a company on a per-share basis. It represents the value of equity that shareholders would receive if the company was liquidated and all of its assets were sold and liabilities were paid off.

To calculate the Book Value Per Share, the total shareholder's equity of the company is divided by the number of outstanding shares. The shareholder’s equity consists of the company’s assets minus its liabilities, which includes things such as retained earnings, preferred stock, and common stock.

This ratio is useful in determining the true value of a company's shares, as it provides information on how much investors would receive if the company was sold or liquidated. It allows investors to assess whether the current market price of a stock is overvalued or undervalued.

A high book value per share indicates that the company has a strong net worth and potential to generate significant returns for investors. Conversely, a low book value per share may suggest that the company has a weak financial position and may not be generating sufficient profits.

It is important to note that book value per share does not necessarily reflect the market value of a company's shares, as it only considers the value of its assets and liabilities at a specific point in time.