1. What is Book Ratio?

The Book Ratio (Book Value per Share) is a financial metric that compares a company's book value to its number of shares outstanding. It represents the amount of money shareholders would theoretically receive for each share if the company was liquidated.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Book Value — Total value of the company's assets minus liabilities (in currency)
• Shares Outstanding — Total number of shares issued by the company

Explanation: The formula divides the net asset value of the company by the number of shares to determine the per-share value.

3. Importance of Book Ratio

Details: Book ratio is important for investors to assess whether a stock is undervalued or overvalued compared to its accounting value. It's particularly useful in value investing strategies.

4. Using the Calculator

Tips: Enter the company's total book value in currency and the number of shares outstanding. Both values must be positive numbers (shares must be at least 1).

5. Frequently Asked Questions (FAQ)

Q1: What's a good book ratio value?
A: Generally, a lower ratio may indicate an undervalued stock, but this varies by industry. Compare with similar companies.

Q2: How does book ratio differ from market price?
A: Book ratio is based on accounting value, while market price reflects investor expectations and market conditions.

Q3: Where can I find book value and shares outstanding?
A: These are typically found in a company's balance sheet in its financial statements.

Q4: Are there limitations to book ratio?
A: Yes, it doesn't account for intangible assets' true value and may be less relevant for service or tech companies.

Q5: How often should I calculate book ratio?
A: It's best calculated quarterly when new financial statements are released, or when significant corporate actions occur.