what is book value per share

Book value per share (BVPS) is a financial ratio that measures the equity available to common shareholders of a company on a per-share basis. It is calculated by dividing the total equity available to common shareholders by the number of outstanding shares. BVPS represents the minimum value of a companys equity and is used to evaluate a companys stock price. If a companys BVPS is higher than its market value per share, then the stock is considered undervalued. BVPS is an accounting-based metric that is recorded on the balance sheet and is not forward-looking like the market value per share. One of the limitations of BVPS is that it does not take into account intangible assets that can affect the price of a companys share.