Book value and market to book value per share, Finance Basics

Assignment Help:

Book Value and Market to book value per share

Book value per share (BVPS) = Net worth Equity/No. of ordinary shares

It is called also liquidity ratio that shows the amount attributable to each share if the firm was liquidated and all asset sold on their book value.
Such ratio is based at the residual amount that would keep after paying all liabilities from the sales proceeds of the assets.

Market to book value per share = MPS/BVPS

This ratio shows the amount of goodwill attached to the firm that is the price in excess of the sales value of the assets of the firm. If the ratio is greater 1 like MBVPS >1 this show a positive goodwill while it is less than 1 a -ve goodwill.

Related Discussions:- Book value and market to book value per share

Valuation, (Interest-rate risk) Philadelphia Electric has many bonds tradin...

(Interest-rate risk) Philadelphia Electric has many bonds trading on the New York Stock Exchange. Suppose PhilEl''s bonds have identical coupon rates of 9.125% but that one issue m

Head office and branch or subsidiary, Head Office and Branch or Subsidiary ...

Head Office and Branch or Subsidiary MNC has diverse operations set up in dissimilar geographical locations. The HQ acts like the principal and the subsidiary like an agent he

Coporate finance, I have an assignment in finance

I have an assignment in finance

PERDIEM CLAIM, how to make a perdiem claim format to maintain the records o...

how to make a perdiem claim format to maintain the records of staff

Similarities between preference share capital and debt, Similarities betwee...

Similarities between Preference Share Capital and Debt Similarities between Preference Share Capital and Debt are as follows: a) Both have fixed returns. b) Both do not

Example of dividend basis valuation, Example of Dividend Basis Valuatio...

Example of Dividend Basis Valuation Company Laxmi Synthetics pays a dividend of 10% on its Sh.60 par value ordinary shares. This company uses a discount rate of 15%. A

Cash flow analysis problem, Problem: Cash Flow Analysis For the attache...

Problem: Cash Flow Analysis For the attached Gantt chart, the following information is available: Invoices are sent at the end of each month. Mark up is 20% on each invoi

Financial analysis, Financial analysis: Financial analysis (also defin...

Financial analysis: Financial analysis (also defined to as financial statement analysis or accounting analysis or Analysis of finance) defines to an assessment of the viabilit

Risk adjusted discounting rate – methods of computing cost, Risk Adjusted D...

Risk Adjusted Discounting Rate - Methods of Computing Cost of Capital This method is used to establish the discounting rate to be used for a provided project. The cost of capi

What are the types of financial assets, What are the types of financial ass...

What are the types of financial assets? Types of Financial Assets: a. Loans b. Bank Deposits c. Stocks A share of ownership within a company d. Bonds A promis

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages