What is the book value?
For a company, enter total assets, total liabilities, any preferred equity and the shares outstanding. For one asset, enter what it cost and the depreciation charged on it so far.
- Book value
- $80,000.00
The book value is $80,000.00.
- Book value per share
- $10.00
- Total equity
- $100,000.00
Book value: $80,000.00. The book value is $80,000.00.
The results are estimates for information only. They are not financial, tax, or legal advice. Check the numbers with your lender or a qualified professional before you decide. Terms of use
How to calculate
Computes the book value of a company (assets minus liabilities, less preferred equity) and per share, or the book value of an asset (cost minus accumulated depreciation).
Example with the default inputs (Book value of A company, Total assets $250,000.00, Total liabilities $150,000.00, Preferred equity $20,000.00, Common shares outstanding 8,000): The book value is $80,000.00.
Method: Company: total equity = total assets − total liabilities; book value = total equity − preferred equity; book value per share = book value ÷ common shares outstanding. Asset: book value = original cost − accumulated depreciation.
- Balance sheet amounts are book (historical cost) values from one date, not market values.
- Preferred equity is the amount that belongs to preferred stockholders on that date.
- Arithmetic is exact on the typed decimals; money shows to the cent, halves up.
Worked examples
Each example is checked against the calculator on every build.
- Book value of A company, Total assets $250,000.00, Total liabilities $150,000.00, Preferred equity $20,000.00, Common shares outstanding 8,000 gives Book value $80,000.00, Book value per share $10.00, Total equity $100,000.00.Source: OpenStax, Principles of Finance, 6.5 Market Value Ratios (book value per share = (total equity − preferred equity) ÷ total shares outstanding; Clear Lake Sporting Goods). https://openstax.org/books/principles-finance/pages/6-5-market-value-ratios: (100,000 − 20,000) ÷ 8,000 = $10
- Book value of An asset, Original cost $58,000.00, Accumulated depreciation $9,600.00 gives Book value $48,400.00.Source: OpenStax, Principles of Financial Accounting, 11.3 Explain and Apply Depreciation Methods to Allocate Capitalized Costs (book value = original cost − accumulated depreciation; Kenzie Company printing press). https://openstax.org/books/principles-financial-accounting/pages/11-3-explain-and-apply-depreciation-methods-to-allocate-capitalized-costs: 58,000 − 9,600 = 48,400
- Book value of An asset, Original cost $58,000.00, Accumulated depreciation $19,200.00 gives Book value $38,800.00.Source: OpenStax, Principles of Financial Accounting, 11.3 Explain and Apply Depreciation Methods to Allocate Capitalized Costs (book value = original cost − accumulated depreciation; Kenzie Company printing press). https://openstax.org/books/principles-financial-accounting/pages/11-3-explain-and-apply-depreciation-methods-to-allocate-capitalized-costs: 58,000 − 19,200 = 38,800
- Book value of A company, Total assets $1,500,000.00, Total liabilities $500,000.00, Common shares outstanding 30,000 gives Book value $1,000,000.00, Book value per share $33.33, Total equity $1,000,000.00.Source: OpenStax, Principles of Finance, 6.5 Market Value Ratios (book value per share = (total equity − preferred equity) ÷ total shares outstanding; Clear Lake Sporting Goods). https://openstax.org/books/principles-finance/pages/6-5-market-value-ratios
How it works
Book value of a company:
- Total equity = total assets − total liabilities
- Book value (of common equity) = total equity − preferred equity
- Book value per share = book value ÷ common shares outstanding
Book value of an asset:
- Book value = original cost − accumulated depreciation
Rules:
- Every amount is $0 or more and at most $1 quadrillion. Shares must be more than 0, at most 1 quadrillion, and may have decimals.
- Preferred equity and shares are optional. An empty preferred box counts as $0; with no shares, the per-share value is not shown.
- A company's book value may come out negative (liabilities above assets); the calculator shows it.
- Accumulated depreciation larger than the asset's cost gives no answer.
- A per-share value too large to show as a number gives no answer. So does a per-share value that is not 0 but too small to show as a number.
- The arithmetic is exact on the decimals you type. Money shows to the cent, with halves rounded up (away from 0).
Assumptions
- Balance sheet amounts are book values (mostly historical cost) from one date, not market values.
- The original cost of an asset includes what it took to get it ready for use, such as shipping and setup.
Worked examples by hand
Clear Lake Sporting Goods. Total assets $250,000 − total liabilities $150,000 = $100,000 of equity. Less $20,000 of preferred equity = $80,000 of book value for common stockholders, or 80,000 ÷ 8,000 = $10 per share.
Kenzie Company's printing press. Cost $58,000 (a $54,000 price plus $1,500 shipping and $2,500 setup). Straight-line depreciation is $9,600 a year. Book value after one year = 58,000 − 9,600 = $48,400; after two years = 58,000 − 19,200 = $38,800.
No preferred stock. Assets $1,500,000 − liabilities $500,000 = $1,000,000 of book value. With 30,000 shares: 1,000,000 ÷ 30,000 = $33.33 per share.
Other questions people ask
What is book value?
Book value is what something is worth on the company's books. For a company, it is total assets minus total liabilities: the equity on the balance sheet. For one asset, it is the original cost minus the depreciation charged so far.
How do I calculate book value per share?
Take total equity, subtract preferred equity, and divide by the common shares outstanding. Clear Lake Sporting Goods had $100,000 of equity, $20,000 of it preferred, and 8,000 shares, so its book value per share was (100,000 − 20,000) ÷ 8,000 = $10.
How do I calculate the book value of an asset?
Subtract the accumulated depreciation from the asset's original cost. Kenzie Company's printing press cost $58,000; after one year of $9,600 depreciation, its book value was $48,400, and after two years $38,800.
What does it mean if the share price is above book value?
OpenStax reads a share price above book value per share as a sign the stock may be overvalued, and a price below it as undervalued. The balance sheet leaves out things such as brands and future earnings, so compare the two with similar companies before drawing a conclusion.
Why subtract preferred equity?
Preferred stockholders are paid before common stockholders if the company is wound up. Book value per share is about common shares, so the part of equity that belongs to preferred stock comes off first. Leave the box empty if there is no preferred stock.
Is book value the same as market value?
No. Book value comes from the balance sheet, mostly at historical cost less depreciation. Market value is what buyers would pay today. A building's book value can be far below its market value after years of depreciation.