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So shareholders equity is total assets - total liabilities while book value is tangible assets - total liabilities. But apparently book value in practice could also just be total assets - total liabilities (here intangible assets are also included). Is this the case in the BVPS formula - (total shareholder's equity - preferred equity) / total outstanding shares) - since the formula just specifies total shareholders equity and not book value? The reason I'm confused is cause of the name (of BVPS) which I assumed implies we use the strict definition of book value.

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Shareholder equity = Book value (tangible+intangible)

Shareholder's equity is the remaining assets available to investors once all liabilities have been paid.

It's calculated as:

Book Value = Shareholder Equity = Total Assets – Total Liabilities

And thus:

BVPS = (Total Assets – Total Liabilities)/(shr outstanding)

Book value (tangible)

Book value (tangible) is:

Book Value (tangible) = Total Assets – Intangible Assets – Total Liabilities
                      = Tangible Assets – Total Liabilities

Following,

Tangible BVPS = (Tangible Assets – Total Liabilities)/(shr outstanding)

But apparently book value in practice could also just be total assets - total liabilities

That is the definition of "book value", but isn't "tangible book value", unless Intangible Assets = 0.

(here intangible assets are also included)

They shouldn't be for Book value (tangible).


Answer question

The reason I'm confused is cause of the name (of BVPS) which I assumed implies we use the strict definition of book value.

You're confused because there are actually two different BVPS variants:

  1. BVPS
  2. Tangible BVPS

It's even on Seeking Alpha in the Supplemental Items section of stocks' balance sheet:

enter image description here


addendum: usually, BVPS (rather than intangible BVPS) is used to compute P/B.

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