What Is Book Value per Share?

Book value per share is a company's total shareholder equity divided by its outstanding shares. It shows the accounting value backing each share — the per-share amount owners would receive if the company were liquidated at balance-sheet values. It is one of the oldest and most conservative valuation metrics.

Book Value vs. Market Value

Book value is built from historical costs recorded on the balance sheet; market value reflects what investors expect the company to earn in the future. The gap between the two is captured by the price-to-book ratio. A P/B below 1 may signal an undervalued or distressed company; a very high P/B usually reflects intangible value — brands, technology, growth — that accounting does not capture.

Tangible Book Value

Subtracting intangible assets such as goodwill and patents yields tangible book value, a stricter liquidation proxy. Comparing the two shows how much of the company's recorded equity is intangible — useful when evaluating asset-heavy businesses like banks versus knowledge-intensive ones.