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Key data: Evolution Shareholder’s equity

Shareholder’s equity or book value growth gives an indication of the growth in financial strength of a company. In a sense it is the growth in shareholder’s equity that represents the growth of a company. The growth of the book value gives an indication of the increase in funds that will finance future growth.

So it can be argued that shareholder’s equity growth is one of a company’s most important standards of value. If the company can maintain the same level of returns on shareholder’s equity then the growth of shareholder’s equity gives an indication of future earnings.

Growth in shareholder’s equity forms the basis for future earnings. The price increase on the stock market is proportional to future earnings and is therefore dependent on the increase in book value. Therefore, growth in shareholder’s equity per share is also much more important than dividend growth. The dividend is lost capital for the company whereas the growth in shareholder’s equity is the driving force behind the future growth of a company.

Charts in the Company Reports

Book value per share

The price scale is on the left side of the chart and the fundamental scale is on the right.

Free samples

Consult the free examples on IRvalue.com (click on 'Charts').