How to Find the Common Stock on a Balance Sheet in Accounting

by Fraser Sherman Google

    Common stock tells you a lot about a company. To get the book value of a single share of stock, for instance, you divide the total value of the common stock by the number of shares. If the company issues only common stock, with no preferred shares, then common stock equals the shareholders' equity -- the value of the company's assets less its business debts. The balance sheet is an equation that balances assets against the total of equity and liabilities.

    Step 1

    Get a copy of the company's quarterly or annual financial reports. These include the balance sheet, the cash flow and income statements. You can find them by going to the company website, the Securities and Exchange Commission website or investing websites such as Morningstar.

    Step 2

    Turn to the balance sheet and locate the different elements. One section covers assets, one gives company liabilities and one states the stockholders' equity. The third section is the one you want.

    Step 3

    Look through the line items grouped together as equity. Along with an entry for common stock, you may also see preferred stock, retained earnings and treasury stock listed.

    Step 4

    Subtract the preferred stock equity -- if the company issues preferred stock -- from total shareholder equity to get the common stock equity. Preferred stock equity equals the value of a share of preferred stock multiplied by the number of shares.

    Items you will need

    • Copy of corporate balance sheet

    Tip

    • Stockholders' equity and common stock equity may not reflect the true value of the company. Accounting principles require the balance sheet to list the asset values at cost, not the market value if the company sold them off.

    About the Author

    Fraser Sherman is a former reporter with the "Destin Log" newspaper and now freelances full-time. His work has been published in "Newsweek," "Air & Space," "Backpacker" and "Boys' Life," and he's the author of three film reference books, including "Screen Enemies of the American Way." He specializes in finance and tech articles.

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