The book value per share is the amount of the assets that will go to common equity in the event of liquidation.

Higher book value means the shares have more liquidation value. The higher the book value, the more the share is worth.

Book value per share growth is a reliable tool to forecast future performance.

**Formula to calculate book value per share.**

Shareholdersâ€™ equity, is the remaining amount of assets after all liabilities have been paid.

Preferred equity is a measure of equity which only takes into account the preferred stockholders, and disregards the common stockholders.

Total Common Shares Outstanding represents the number of primary common shares equivalent outstanding.

**Example:**

XYZ stock has $20 million of stockholders’ equity, $5 million of preferred stock, and an average of 3 million shares outstanding during the measurement period.

Therefore, the BVPS is $ 5.