Australian investors are constantly searching for ways to cut through market noise and identify shares with real, underlying value. In 2025, with volatility still a theme and regulatory shifts impacting reporting standards, Book Value of Equity Per Share (BVPS) is gaining renewed attention. But what exactly does this metric mean, and how should you use it in your investing toolkit?

What is BVPS—and Why Does It Matter in 2025?

BVPS stands for Book Value of Equity Per Share. It’s a fundamental metric that shows the accounting value of a company’s equity, divided by the number of outstanding shares. In simpler terms, it tells you how much each share would be worth if the company was liquidated at its book value—after all liabilities are paid off.

2025 update: The Australian Securities and Investments Commission (ASIC) has introduced stricter requirements for asset revaluations and impairment reporting, making book values more reflective of true market conditions. This means BVPS in 2025 is generally a more reliable indicator than in previous years.

Investors use BVPS to:

Spot undervalued shares, especially in sectors like finance and resources
Assess the margin of safety before investing
Compare a company’s market price to its accounting value

How is BVPS Calculated? (With Real-World Example)

The formula is straightforward:

BVPS = (Total Equity – Preferred Equity) / Total Outstanding Shares

Let’s use a 2025 example. Suppose Aussie tech firm GreenCompute Ltd reports:

Total shareholders’ equity: $500 million
Preferred shares: $50 million
Outstanding ordinary shares: 90 million

BVPS = ($500m – $50m) / 90m = $5 per share

If GreenCompute shares are trading at $4.20, the market is valuing the company below its book value—potentially signalling an undervalued opportunity, or perhaps concerns about future earnings or asset quality.

BVPS in Context: Strengths, Limitations & 2025 Trends

BVPS isn’t a magic number—it’s a starting point for deeper analysis. Here’s what matters in 2025:

Sector Sensitivity: BVPS is more meaningful for asset-heavy businesses (like banks, miners, and insurers) than for tech or service firms, where intangible assets drive value.
Accounting Changes: New AASB 2025 standards require more frequent revaluation of non-current assets, which can cause bigger swings in reported book values. This could make BVPS more volatile for some sectors.
Market vs. Book Value: If a stock trades well above BVPS, it often means the market expects strong future growth or significant intangible value. If it’s below, investors may see risk—or a bargain. For example, in early 2025, several ASX-listed regional banks traded at a discount to BVPS due to economic headwinds, sparking activist investor interest.

However, BVPS doesn’t capture:

Brand value or intellectual property
Growth prospects or future earnings
Current market value of assets (unless recently revalued under new rules)

How Aussie Investors Are Using BVPS Right Now

With market volatility and higher interest rates in 2025, value investing is back in vogue. BVPS is a core metric for:

Screening for value stocks—especially in the wake of asset write-downs or restructures
Comparing companies within the same sector, such as using BVPS to evaluate regional banks or listed property trusts (REITs)
Spotting takeover targets, as companies trading below BVPS may attract attention from private equity or strategic buyers

But smart investors always dig deeper, combining BVPS with metrics like return on equity (ROE), price-to-book (P/B) ratio, and forward earnings outlooks before making a move.

Conclusion: Is BVPS Still Relevant in 2025?

In the ever-evolving world of Australian investing, BVPS remains a valuable tool—especially for those seeking value or assessing downside risk. But it’s only one piece of the puzzle. With 2025’s updated accounting rules and shifting sector dynamics, understanding what’s behind the number is more crucial than ever.