Editorials

Book value per share (BVPS) is the oldest per-share number in value investing. The arithmetic is simple: take total shareholders' equity from the balance sheet, subtract any preferred equity, and divide by shares outstanding. The result is the accounting net worth attributed to each share. Investors compare it with the market price through the price-to-book ratio (price divided by BVPS), and for decades that comparison was a central screen for cheap stocks.

The number is most useful when a company's value sits mainly in assets that the balance sheet records close to their economic worth. It becomes misleading when a company has spent heavily on buybacks, when its main assets are intangible, or when its earnings power is far above what its equity base suggests. Apple is a clear case of the last two. Its latest figures show why BVPS can be tiny relative to the share price even for a very profitable business.

The table below uses total stockholders' equity as reported in Apple's 10-K and 10-Q filings for the periods shown. Figures are converted from dollars to billions and rounded.

Equity was roughly flat for the first three reported dates and then rose in each of the last three. That pattern matters for the buyback argument. Apple repurchased $90.7 billion of its own stock in fiscal 2025 and $94.9 billion in fiscal 2024, according to its cash flow statements, so the company has been returning far more capital than the book equity figure alone would suggest. Net income of $112.0 billion in fiscal 2025 more than covered those repurchases and $15.4 billion of dividends, which is why the equity base recovered. Buybacks do not shrink equity in absolute terms here. They hold equity down relative to what it would otherwise be.

In its 10-Q for the quarter ended June 27, 2026, Apple reported equity made up of three lines: common stock and additional paid-in capital, retained earnings, and accumulated other comprehensive loss. The three lines reconcile to the reported total:

Retained earnings are small. At the December 27, 2024 balance-sheet date they were negative, at a deficit of $11.2 billion. This is the buyback effect in the accounts. Apple's repurchases have been large enough that the cumulative earnings retained in the business have been close to exhausted by the capital returned to shareholders, and the common stock and paid-in capital line carries most of the reported equity. A reader who divides this $107.5 billion by the share count gets a per-share number that describes the accounting history of repurchases, not the earning power of the operating business.

Moatkeep's computed key metrics for Apple, based on fundamentals as of July 31, 2026, put book value per share at $7.37 and the price-to-book ratio at 46.7. The same data set puts market capitalization at about $5.02 trillion. Market value divided by reported equity of $107.5 billion gives a ratio of roughly 46.7, which matches the computed price-to-book figure and confirms the two are built on the same base.

Apple's share count is falling. Its diluted weighted-average shares were 15.41 billion in fiscal 2024, 15.00 billion in fiscal 2025, and 14.71 billion in the quarter ended June 27, 2026, according to its income statements. Repurchases are reducing the denominator of the BVPS calculation at the same time they draw down the numerator's retained-earnings component. Those two effects do not offset each other in a simple way. The ratio is moved by the company's capital allocation, its profit, and the price at which it buys back stock, and the book figure reflects only the first two in accounting terms.

BVPS works best for businesses whose capital is tangible and recorded close to market value: banks and other financial firms whose assets are loans or securities, insurers, and capital-intensive industrial or utility companies whose plants are their main economic asset. In those businesses, book equity is a reasonable proxy for the capital that owners have at risk.

Apple is a different kind of company. In its 10-Q for the quarter ended June 27, 2026, the company reported total assets of $383.3 billion, of which property, plant and equipment, net, was $51.4 billion and intangible assets, net, were $25.4 billion. A large part of the rest is cash and marketable securities. Its liabilities of $275.7 billion include $82.3 billion of long-term debt. The business earns most of its profit from design, brand, software, and services, which the balance sheet records only in small part. That is why the tangible-book figure of $5.63 per share is lower than the headline BVPS, and why the price-to-tangible-book ratio of about 61 is higher than the price-to-book ratio.

A cleaner test for an asset-light compounder is return on the capital it actually uses, along with whether its buybacks are funded from operating cash flow. Apple's operating cash flow was $111.5 billion in fiscal 2025, and its repurchases of $90.7 billion were covered by that figure and by the cash balance. A reader comparing it with a bank or a utility should expect book value to say much less about what the owners own.

The shift from book value to intrinsic value is most often associated with Warren Buffett and with the investors who learned from him. Book value was a useful anchor when most of a company's economic worth was in its tangible assets. As businesses came to depend on brands, software, distribution and customer relationships, the accounting figure lost explanatory power. The approach that followed asks what the owners could take out of the business over its remaining life, discounted for time and risk. That estimate is harder to compute and is open to disagreement, but it does not depend on how past repurchases have been recorded in equity.

Book value still matters as a check. It shows how much capital the company has put to work, how much it has returned, and whether accounting losses or pension and currency effects are building up in equity. For Apple, the number is most useful as a record of capital returned to shareholders rather than as a measure of what the business is worth.

To read BVPS well, divide equity by shares outstanding, then ask three questions. Is the equity mostly tangible and close to market value? Has the company been retiring stock, and at what price relative to its earnings? Does the company's return on capital come from assets that the balance sheet does not show? Where the answer to the first question is no, as it is for Apple, the price-to-book ratio is better treated as one input among several. Moatkeep's screener lets readers compare book value, tangible book and price-to-book across companies, and the Apple company page sets out the filings and metrics referenced here.