Leverage

A 1-to-1 long-term debt to stockholders equity ration is considered high when purchasing stocks.

Using Book Value Per Share to Value a Stock

Two corporations have a book value per share at $10 Company A trades at $5, Company B at $20. Assuming both are similar terms of earnings and balance sheet structure, company A would be considered a better purchase.

Book Value Per Share

A stock's book value per share is calculated starting with its balance sheet:

Assets minus liabilities equals equity. Divide equity by the number of common stock shares outstanding and to get the book value per share.