Tangible book value per share (TBVPS) is the total equity available excluding any intangible assets divided by the number of shares outstanding. It’s a way of determining value of the company equity by adjusting for intangible assets on per share basis. A tangible asset is considered any resources owned by the company that has commercial or exchange value and has a physical form.
The formula for calculating TBVPS is using the total tangible assets and dividing it by the number of shares outstanding :
Tangible book value per share (TBVPS) = Total Tangible Assets / Shares Outstanding
Tangible assets = Total Assets - Intangible assets
Intangible assets are listed on the company balance sheet and are items like: intellectual property, patents, trademarks, goodwill etc.
Tangible book value per share focuses on the value of an organisation’s tangible assets, such as buildings and equipment and its excluding intangible assets that are difficult to value and monetise. Theoretically the TBVPS is the amount that a shareholder will receive if the company was about to be liquidated all of its tangible assets sold and all its liabilities where paid.