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GuruFocus has detected 2 Warning Signs with Rio Tinto PLC \$RIO.
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Rio Tinto PLC (NYSE:RIO)
Tangible Book per Share
\$19.38 (As of Dec. 2016)

Tangible book value per share is calculated as the total tangible equity divided by Shares Outstanding (EOP). Total tangible equity is calculated as the total equity minus preferred stock minus intangibles. Rio Tinto PLC's tangible book value per share for the quarter that ended in Dec. 2016 was \$19.38.

Since intangibles such as goodwill cannot be sold when the company liquidates, tangible book value per share is considered more accurate in reflecting how much shareholders will receive when the company liquidates.

Definition

Rio Tinto PLC's Tangible Book Value Per Share for the fiscal year that ended in Dec. 2016 is calculated as

 Tangible Book Value per Share = (Total Equity - Preferred Stock - Intangibles) / Shares Outstanding (EOP) = (39290 - 0 - 4230) / 1808.71 = 19.38

Rio Tinto PLC's Tangible Book Value Per Share for the quarter that ended in Dec. 2016 is calculated as

 Tangible Book Value per Share = (Total Equity - Preferred Stock - Intangibles) / Shares Outstanding (EOP) = (39290 - 0 - 4230) / 1808.71 = 19.38

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Theoretically it is what the shareholders will receive if the company is liquidated. Total equity is a balance sheet item and equal to total assets less total liabilities of the company. Since intangibles such as goodwill cannot be sold when the company liquidates, tangible book value per share is considered more accurate in reflecting how much shareholders will receive when the company liquidates.

Explanation

Usually a companys book value and Tangible Book Value per Share may not reflect its true value. The assets may be carried on the balance sheets at the original cost minus depreciation. This may underestimate the true economic values of the assets. It also may over-estimate their true economic value because the assets can become obsolete.

For financial companies such as banks and insurance companies, their assets may be reported in current market value of the assets owned. Book values of financial companies are more accurate indicator of the economic value of the company.

Related Terms

Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their local exchange's currency.

Rio Tinto PLC Annual Data

 Dec07 Dec08 Dec09 Dec10 Dec11 Dec12 Dec13 Dec14 Dec15 Dec16 Tangibles_book_per_share -1.67 0.03 11.16 19.00 19.27 20.13 21.02 21.05 18.31 19.38

Rio Tinto PLC Semi-Annual Data

 Jun12 Dec12 Jun13 Dec13 Jun14 Dec14 Jun15 Dec15 Jun16 Dec16 Tangibles_book_per_share 21.18 20.13 19.54 21.02 22.35 21.05 19.67 18.31 14.91 19.38
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