Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 7 terms
Net worth divided by the number of shares outstanding.
The anchor of a lender’s valuation, because its assets are financial and its return is earned on the capital base. For a business whose value sits in brands or people it says very little.
The rise in book value per share produced by issuing new shares above the existing book value — and the fall produced by issuing below it.
Why the identical press release is different news at different prices. The same money funds the same loans; whether existing holders end up with more book per share or less depends entirely on what the new shareholders paid.
The rate at which a bank's book value per share compounds — roughly its return on equity less whatever it pays out.
Over long periods the share price tracks this far more closely than it tracks any single year of earnings.
Price divided by book value per share.
Essential for banks. Nearly meaningless for asset-light businesses whose real assets are people.
The subtotal of consolidated equity belonging to the parent’s shareholders, before non-controlling interests are added to arrive at total equity.
The right denominator for book value per share, and for a return on equity whose numerator is profit attributable to owners. Mixing the two levels gives the flattering answer wherever the non-controlling share of profit is positive, and the pessimistic one where the partly owned subsidiary is losing money.
The purchase by a parent of the shares in a subsidiary held by others, where control was already held — accounted for as a transaction between owners, with the excess over the carrying amount of the non-controlling interest charged directly to equity.
No goodwill and nothing through profit. Earnings per share rises whenever the profit picked up beats the after-tax funding cost, which holds across a wide span of prices, and book value per share falls at any price above the carrying amount bought out — so neither movement is evidence that the price was sensible.
The share of a subsidiary’s profit and of its net assets belonging to shareholders other than the parent — presented as a separate line in consolidated profit and separately inside consolidated equity.
The Ind AS name for what older accounts called minority interest, and it has two halves. Ignore the profit half and earnings per share is overstated; ignore the equity half and book value per share is.