How this calculator works
Compare the market price of a common share with its share of book equity. Subtract preferred equity before dividing by common shares, and subtract goodwill and other intangibles for tangible book value. A tangible-book multiple is shown only when tangible common equity is positive; ordinary P/B can still be calculated independently.
Formula
Common BVPS = (total equity - preferred equity) / common shares. Tangible BVPS = (total equity - preferred equity - intangibles) / common shares. P/B = price / BVPS; P/tangible book = price / tangible BVPS.
Worked example
$1,100,000 total equity less $100,000 preferred equity over 100,000 shares gives $10 book value per common share. Deducting $200,000 intangibles gives $8 tangible book value. At $15 per share, the multiples are 1.5 and 1.875.
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Frequently asked questions
Why subtract preferred equity?
The common share price should be compared with equity attributable to common shareholders, after the preferred claim.
What belongs in intangible assets?
Include goodwill and other recognized intangible assets consistently with the financial statements used.
Does book value represent liquidation proceeds?
No. Accounting carrying values can differ greatly from sale proceeds, and liquidation introduces costs and claim priorities.