Calculating Common Stock Value

by Lola James ; Updated July 27, 2017

Research the Common Stock Value

Before purchasing stock in a company, research the company’s common stock value. This value allows you to estimate the profit you could possibly make from purchasing the stock, holding on to it or selling it. Start by obtaining the financial statements of the company you are interested in purchasing stock from.

Book Value

A company’s book value, or their “worth,” is the first value needed for calculating the common stock value. According to Investopedia, a good way to find a company’s book value is by referring to the company’s balance sheet and seeing what their shareholders own. This is referred to as the shareholders' equity. It can be found in the “equity section” of the company’s balance sheet.

Outstanding Shares

Once you have the shareholders' equity in the company, find out the number of outstanding shares. This can be found next to the common stock label in the company’s financial statements. If it is not there, it can be found in the notes section located in the back of the financial statements. After finding these two values, divide the shareholders' equity by the number of outstanding shares to give you the value of the common stock of the company.

About the Author

lolajames is a freelance writer born and raised in new orleans, la. she is the president of lolawrites, llc a freelance writing firm. her book "HEY! Where'd My Money Go!?!" has just been completed and is a handy guide to keeping YOUR money in YOUR pocket. for more information on her book or to view more of her writings you can feel free to visit her website @ www.lolawrites.net