When you calc Book Value, do you use primary or diluted shares? (sorry for the stupid question - just want to make sure)
Todd,
Not a stupid question. But if you'd asked me 24 hours ago i'd have given a stupid answer.
Lets start at the beginning shall we? That will reduce my chances of screwing this up. The ballance sheet presents information based on the basic accounting equation:
Assets = Liabilities - Owners Equity
"Owners Equity", as a concept is a litte wierd. But for general investing purposes its simple enough to see that:
Assests - Liabilities = Owners Equity(OE)
Book Value per share = Owners Equity/Shares Outstanding
Shares Outstanding = the number of shares currently in the market.
APM Owners Equity = 240,781,000 (It says so right near the bottom of the ballance sheet.)
APM Shares Outstanding = 23,976,711 (says so in the OE section of the ballance sheet)
240,781,000 / 23,976,711 = 10.04 BV per share
Baseline was giving me book value of 9.6. But with the real numbers right in front of me its clear that they(and me) were wrong. Not a big dif anyway.
Book Value is NOT what you get when you liquidate the company. Nor is it the minumum value of what the company is worth in a takeover situation. This is because the ballance sheet generally represents assets based on their historical costs(what was paid for them). NOT fair market value(what they're worth if you try to sell them)
I was saying something to AT about fully diluted book value. It turns out this is a totally useless, erroneus and misleading concept. Forget I said it. A thousand pardons AT.
Jon Bird
Go APM!!!
down I mean |
