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Tangible Book Value per Share (TBVPS) Screener Formula Breakdown
Total balance sheet net worth reported under GAAP/IFRS.
Excess purchase price paid over fair value in past corporate acquisitions.
Non-physical accounting assets including patents, trademarks, software IP, and customer lists.
Valuation multiple comparing current share price to physical liquidation backing per share.
How to Calculate Tangible Book Value Step-by-Step
Extract total common stockholders' equity from the balance sheet.
Identify and subtract all recorded goodwill from historical M&A transactions.
Subtract all capitalized patents, trademarks, and finite/infinite-lived intangible assets.
Divide net tangible equity by total diluted shares outstanding to calculate TBVPS.
Compute Price-to-Tangible-Book (P/TBV) and classify valuation: Deep Value (< 1.0x), Fair (1.0x - 2.5x), or Premium (> 3.0x).
How to Interpret the Result
Frequently Asked Questions
Why is Tangible Book Value crucial for banking and financial stocks?
Banks and insurers hold financial assets and liabilities where book value closely approximates liquidation value. P/TBV is the universal metric used by institutional analysts to price financial institutions.
Can tech companies have negative Tangible Book Value?
Yes! High-return software leaders (like Apple, Microsoft, or Accenture) produce enormous cash with minimal physical assets, often repurchasing shares and holding negative tangible book value while generating elite returns on capital.
What is the difference between Book Value and Tangible Book Value?
Standard book value includes unamortized goodwill and intangible assets. Tangible book value aggressively removes all non-physical assets, leaving only hard cash, buildings, inventory, receivables, and equipment.
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