In one sentenceCommon shareholders' equity in the books divided by the number of shares outstanding, meaning each share's portion of the company's net assets.
Simply put
If the company's assets were sold at their book value and all its liabilities were paid, this is roughly what would remain for each share.
It is an accounting figure mostly based on cost, so it may differ greatly from the share's market price. Preferred shareholders' claims are subtracted from it if there are any, because they rank ahead of common shares.
Worked example
A company's equity in the statement of financial position is 8,000,000 SAR, it has 2,000,000 shares outstanding, and no preferred shares.
Common shareholders' equity8,000,000 SAR
Shares outstanding2,000,000 shares
Book value per share = 8,000,000 ÷ 2,000,0004 SAR
Formula: (Equity − preferred shareholders' claims) ÷ number of common shares outstanding
Don't confuse it with
Book valueThe book value of an asset is its cost minus accumulated depreciation; here it means each share's portion of equity.