Tangible Assets per Share

Welcome to the Value Sense Blog, your resource for insights on the stock market! At Value Sense, we focus on intrinsic value tools and offer stock ideas with undervalued companies. Dive into our research products and learn more about our unique approach at valuesense.io.

Explore diverse stock ideas covering technology, healthcare, and commodities sectors. Our insights are crafted to help investors spot opportunities in undervalued growth stocks, enhancing potential returns. Visit us to see evaluations and in-depth market research.

What is Tangible Assets per Share?

Tangible Assets per Share represents the tangible assets of a company, such as machinery, buildings, and equipment, divided by the number of outstanding shares, indicating the physical assets attributable to each share.

How do you interpret Tangible Assets per Share?

Tangible Assets per Share indicates the physical asset backing for each share, useful for assessing the company’s tangible worth.

How to Calculate Tangible Assets per Share?

Tangible Assets per Share is calculated by subtracting intangible assets (like goodwill and intellectual property) from total assets and then dividing the result by the number of outstanding shares.

Tangible Assets per Share = (Total Assets - Intangible Assets) / Number of Outstanding Shares

where

• Total Assets refers to all assets owned by the company.
• Intangible Assets include items like goodwill and patents.
• Outstanding Shares are the total shares held by investors.

Why is Tangible Assets per Share important?

Tangible Assets per Share is important because it provides a clearer view of the tangible, physical asset value attributed to each share. It can be particularly helpful in assessing companies that rely heavily on physical capital and are sensitive to fluctuations in asset valuations. Investors often use it to determine the downside risk of a stock in case of liquidation, as tangible assets typically have a realizable value.

How does Tangible Assets per Share benefit investors?

This metric is useful for value investors looking for stocks with significant tangible asset backing. Tangible Assets per Share provides reassurance that there are hard assets supporting each share of stock, which can mitigate downside risk, especially during economic downturns or in cases of liquidation.

Using Tangible Assets per Share to Evaluate Stock Performance

Tangible Assets per Share is often used in conjunction with other financial ratios, such as the P/B ratio, to evaluate whether a stock is undervalued or overvalued based on its physical asset base. A stock trading below its tangible asset value may be considered undervalued, especially if the company has solid earnings prospects.

FAQ about Tangible Assets per Share

What is a Good Tangible Assets per Share?

The value of Tangible Assets per Share depends on the industry. In industries with heavy reliance on physical assets, a higher Tangible Assets per Share is generally considered positive. In contrast, in tech or service-based industries where intangible assets are more significant, this metric might be less relevant.

What Is the Difference Between Metric 1 and Metric 2?

Tangible Assets per Share excludes intangible assets like goodwill, while Book Value per Share includes both tangible and intangible assets. This makes Tangible Assets per Share a more conservative measure of a company’s asset value.

Is it bad to have a negative Tangible Assets per Share?

A low Tangible Assets per Share may indicate that a company has fewer physical assets relative to its share count, which could be a concern in asset-heavy industries. However, for companies reliant on intangible assets, like tech firms, this may not be an issue.

What Causes Tangible Assets per Share to Increase?

Tangible Assets per Share can increase due to:

An increase in physical assets.
A reduction in the number of outstanding shares (due to share buybacks).
Asset appreciation, if the value of tangible assets rises.

What are the Limitations of Tangible Assets per Share?

This metric does not account for intangible assets, which can be a significant part of a company's value in industries like technology and pharmaceuticals. Additionally, it doesn’t provide information on the company's liabilities, profitability, or cash flow.

When should I not use Tangible Assets per Share?

Tangible Assets per Share is less useful for companies in industries where intangible assets are crucial. For example, companies that generate value through intellectual property or branding, like those in the tech or pharmaceutical sectors, may not be accurately valued using this metric.

How does Tangible Assets per Share compare across industries?

Tangible Assets per Share varies significantly across industries. In asset-heavy industries like manufacturing, real estate, and utilities, this metric is highly relevant. However, in sectors where intangible assets are more important, such as technology or services, other metrics like Earnings per Share (EPS) or Price-to-Earnings (P/E) might be more informative.

Explore More Investment Opportunities

For investors seeking undervalued companies with high fundamental quality, our analytics team provides curated stock lists:

📌 50 Undervalued Stocks (Best overall value plays for 2025)
📌 50 Undervalued Dividend Stocks (For income-focused investors)
📌 50 Undervalued Growth Stocks (High-growth potential with strong fundamentals)

🔍 Check out these stocks on the Value Sense platform for free!