# Shareholders Equity

In order to calculate the shareholders equity to know how much is the Book value of a share, do we calculate the difference between the current assets and liabilities, or we should include the difference between the intangible assets and liabilities, and what about the goodwill does have to be included or discarded?

The book value of a company is simply total assets minus total liabilities (it's the equity value on the balance sheet). If a company has total assets of \$100M and total liabilities of \$70M, the book value of equity is \$30M. Read here for an article that describes the book value and market value of equity.

The book value per share is the book value of the company divided by the total number of shares outstanding.

The tangible book value is the book value less intangible assets and goodwill.

Goodwill is an intangible asset and you do not include intangible assets and liabilities while calculating the book value of a share.

Here are the steps to calculate book value of a share :-

``````1. + Gross Block
2. - Depreciation
3. + Investments
4. + Capital Work in progress
5. + Net current assets
6. - Total Debt.
``````

i.) This will give you a number which is the net worth of the company.

ii) Get the number of shares outstanding (Market Cap/ Price)

iii) Divide i/ii. This is your book value.