Tangible Book Value per Share

The net asset value of a company per share, excluding intangible assets like goodwill, patents, and intellectual property.

Tangible Book Value per Share (TBVPS) represents the value of a company's physical, tangible assets that would theoretically remain if the company went out of business and liquidated today, divided by its outstanding shares. By stripping away intangible assets like goodwill, patents, trademarks, and intellectual property, this metric provides a conservative baseline valuation of a company's hard balance sheet strength. This metric is highly valued by investors analyzing financial institutions, capital-intensive businesses, or distressed companies. Because intangible assets can be difficult to value accurately or sell quickly during a liquidation, focusing on tangible assets offers a more realistic safety margin. Comparing the current stock price to TBVPS helps investors determine if a stock is trading at a premium or discount to its net physical assets. An increasing TBVPS over time indicates organic capital accumulation, retained earnings, and balance sheet growth. Conversely, a declining TBVPS can signal asset write-downs, share dilution, or unprofitable operations. A common pitfall is relying solely on TBVPS for asset-light technology or service companies, where the primary value drivers are intellectual property and brand equity rather than physical machinery or real estate.

Company A has total assets of $1,000 million, total liabilities of $600 million, and intangible assets of $100 million. Its tangible common equity is calculated as $1,000 million - $600 million - $100 million = $300 million. If there are 10 million diluted shares outstanding, the Tangible Book Value per Share is $300 million / 10 million = $30.00.