How Do You Calculate The Book Value Of A Stock?
In the world of accounting and finance assets tend to have two different values: book value and market value. Market value is the value of an asset in the market–the price you can reasonably obtain for the asset if you sell it. Book value is the accounting value or the value of the asset that is on the books. In theory, book value should be the same as market value, but in actuality there are often discrepancies. One measure analysts look at to highlight discrepancies is the book value of stock. Obtain the balance sheet of the company. You can request one from your broker or the investor relations department for the company. You may also be able to download a copy from the company website. Scroll down to the section titled “Stockholders’ Equity.” Identify the values for total shareholders’ equity, preferred equity and total shares outstanding. Not all companies have preferred equity. Subtract the value for preferred stock from the value for total shareholder’s equity. Divide this diff
