The Equity Value Per Share Calculator helps investors, analysts, and company stakeholders estimate the intrinsic value of a company’s common stock based on its book equity. This metric is particularly useful when evaluating whether a company’s shares are overvalue or undervalue relative to its financial fundamentals. By dividing the shareholders’ equity by the total number of outstanding common shares, users can gain insight into the per-share value from the company’s balance sheet perspective.
Formula of Equity Value Per Share Calculator
Equity Value Per Share = Shareholders’ Equity / Total Outstanding Shares
This formula yields a figure that represents the book value of each share of common stock based on accounting data, not market price.
Detailed Breakdown
Shareholders’ Equity
This is the residual value of assets after all liabilities are pay. It includes common stock, retained earnings, and additional paid-in capital. It reflects the total net worth of the company from an accounting standpoint.
Total Assets − Total Liabilities = Equity
If equity is not directly stated, subtract liabilities from assets to calculate it.
Total Outstanding Shares
This refers to all common shares that are currently held by shareholders, excluding any treasury shares the company might be holding. These figures are typically disclose in a company’s annual report or quarterly filings.
Equity Value Per Share Output
The result represents the per-share value of the company’s equity. For example, if shareholders’ equity is $500 million and there are 100 million shares outstanding, then:
Equity Value Per Share = $500,000,000 / 100,000,000 = $5.00
Table of Common Search Terms and Practical References
| Term or Query | Explanation or Relevance |
|---|---|
| Equity value per share vs. market price | Market price is driven by investor sentiment; equity value is book-based |
| Book value per share calculation | Another name for equity per share using accounting data |
| How to calculate shareholders' equity | Total assets minus total liabilities |
| Outstanding shares vs. authorized shares | Outstanding are issued and held; authorized are approved but unissued |
| Shareholder equity on balance sheet | Typically found in the bottom section of the balance sheet |
This table is useful for quickly addressing related questions that often arise during equity analysis.
Example of Equity Value Per Share Calculator
Assume a company has the following data:
- Total Assets: $750 million
- Total Liabilities: $250 million
- Total Outstanding Shares: 125 million
Step 1: Calculate Shareholders’ Equity
Equity = $750 million − $250 million = $500 million
Step 2: Apply the Formula
Equity Value Per Share = $500 million / 125 million = $4.00
This means each share represents $4 of book equity based on current financial data.
Most Common FAQs
It shows how much value a shareholder theoretically holds in a company per share based on its financials.
Yes, the market price is influenced by demand, expectations, and external factors, while equity value is derived from the balance sheet.
It provides a benchmark for comparing stock price to company value, helping identify undervalued or overvalued shares.