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Tangible Book Value Per Share (TBVPS)

What is a 'Tangible Book Value Per Share - TBVPS'

A tangible book value per share (TBVPS) is a method of valuing a company on a per-share basis by measuring its equity after removing any intangible assets, and the tangible book value per share is calculated as follows:

Explaining 'Tangible Book Value Per Share - TBVPS'

The tangible book value per share (TBVPS) focuses solely on the value of an organizations tangible assets. Once the value of the tangible assets is determined, that amount is divided by the number of shares currently outstanding.

Purpose of Tangible Book Value Per Share Valuation

The TBVPS provides an estimate of what each share would be valued at should the company go bankrupt and be forced to sell their assets. Since certain intrinsic characteristics, such as good will or employee knowledge, cannot be liquidated for a price, any value in those intangibles are not included in the estimate. The TBVPS applies only to physical items that can be handled and sold.

Examples of Tangible Assets

An organization's tangible assets can include any physical products the company produces, as well as any materials used to create them. Should an organization be in the business of producing bicycles, any completed bicycles, any unused bicycle parts and any raw materials (such as metal for fabrication) would qualify as tangible assets. The value of these assets is determined based on what price they would draw should the company need to liquidate, most commonly in the event of a bankruptcy.

Understanding Book Value

Book value refers to the ratio of stockholder equity to the number of shares. It is takes into account only the accounting valuation, which may not be an accurate reflection of current market valuation.


Further Reading


Study on the Relevance of Intangible Assets and Companys Values Based on the Listed Companies of IT Industry
ieeexplore.ieee.org [PDF]
… Enterprise book value refers to the value disclosure and recognized according to the accounting elements definition of the … Meanwhile it has a negative correlation with tangible assets per share … The Tobin`s Q value will increase by 179.59 percent if the technical intangible assets …

Principles of company valuation. A comprehensive guidePrinciples of company valuation. A comprehensive guide
diposit.ub.edu [PDF]
… Enterprise book value refers to the value disclosure and recognized according to the accounting elements definition of the … Meanwhile it has a negative correlation with tangible assets per share … The Tobin`s Q value will increase by 179.59 percent if the technical intangible assets …

BANK RATINGS INFERENCE THROUGH PRINCIPAL COMPONENTS-MAHALANOBIS METHODOLOGYBANK RATINGS INFERENCE THROUGH PRINCIPAL COMPONENTS-MAHALANOBIS METHODOLOGY
elibrary.ru [PDF]
… Enterprise book value refers to the value disclosure and recognized according to the accounting elements definition of the … Meanwhile it has a negative correlation with tangible assets per share … The Tobin`s Q value will increase by 179.59 percent if the technical intangible assets …

Assessing the impact of self-organizing map on genetic fuzzy set hybrid intelligent systems for financial predictionAssessing the impact of self-organizing map on genetic fuzzy set hybrid intelligent systems for financial prediction
ieeexplore.ieee.org [PDF]
… Enterprise book value refers to the value disclosure and recognized according to the accounting elements definition of the … Meanwhile it has a negative correlation with tangible assets per share … The Tobin`s Q value will increase by 179.59 percent if the technical intangible assets …

Ex-day effects for seasoned equity offerings in the Greek capital marketEx-day effects for seasoned equity offerings in the Greek capital market
repository.ihu.edu.gr [PDF]
… Enterprise book value refers to the value disclosure and recognized according to the accounting elements definition of the … Meanwhile it has a negative correlation with tangible assets per share … The Tobin`s Q value will increase by 179.59 percent if the technical intangible assets …

Behavioural influences in portfolio compositionBehavioural influences in portfolio composition
skemman.is [PDF]
… Enterprise book value refers to the value disclosure and recognized according to the accounting elements definition of the … Meanwhile it has a negative correlation with tangible assets per share … The Tobin`s Q value will increase by 179.59 percent if the technical intangible assets …



Q&A About Tangible Book Value Per Share (TBVPS)


What are some examples of intangible assets that would be removed from the calculation for a company with a high TBVPS?

Goodwill and employee knowledge would not be included in this calculation.

What is a tangible book value per share?

A tangible book value per share is the ratio of stockholder equity to number of shares.

Why is it important for companies to have a high TBVPS?

It helps investors determine if they should invest in that company or not.

What does TBVPS focus on?

The TBVPS focuses solely on the value of an organization's tangible assets.

How do you calculate TBVPS?

To calculate TBVPS, you divide the value of an organization's tangible assets by number of shares currently outstanding.