Financial Accounting

Learn the toughest concepts covered in your Financial Accounting class with step-by-step video tutorials and practice problems.

Financial Statement Analysis

Ratios: Book Value per Share of Common Stock

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Ratios: Book Value per Share of Common Stock

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Problem

MoneyCo had sales revenue and net income during the current year of $500,000 and $60,000, respectively. The total amount of stockholders’ equity was $600,000, and common shares outstanding were 120,000 all year. If the market price of the stock is $10, what is the book value per share of common stock?

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Problem

Tougher Company’s current year income statement showed an EPS of $1.25 per share. If total equity was $600,000 (40,000 common shares, $1 par), preferred dividends were $10,000 (10,000 preferred shares with $10 book value each), and the market price of common and preferred stock are $25 and $50, respectively, what is the book value per share of common stock?