What is Book Value per Share?
Book value per share equals shareholders’ equity (excluding preferred equity) divided by the number of ordinary shares outstanding. It approximates the accounting net worth backing each share.
How It Works
- Take total equity attributable to ordinary shareholders.
- Divide by ordinary shares outstanding at period-end.
- Compare to market price to gauge the price-to-book ratio.
Saudi Context
Saudi bank stocks on Tadawul often trade at 1.2 to 1.8x book value, with the price-to-book ratio a key valuation lens used by analysts.
Example
A Saudi company with SAR 5 billion equity and 500 million shares outstanding has a book value of SAR 10 per share.