Definition of Tangible Book Value per Share (TBVPS)
It is a percentage of tangible assets on a company’s balance sheet attributable to each share of common stock. It excludes goodwill and items categorized as intangible assets on the balance sheet.
Tangible Book Value per Share (TBVPS) is calculated by the following formula;
TBVPS = (Tangible Book Value – Book Value of Preferred Stock) / Common Shares Outstanding
A company’s tangible book value tells the expectation of common shareholders to receive if the firm goes bankrupt and all of its assets are disband at their book values. Intangible assets, such as goodwill, are excluded from this calculation because they cannot be vend during liquidation. Companies with high (TBVPS) provide shareholders with more insurance in case of bankruptcy.