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The price-to-book ratio, or P/B ratio, (also PBR) is a financial ratio used to compare a company's current market value to its book value (where book value is the value of all assets minus liabilities owned by a company). The calculation can be performed in two ways, but the result should be the same.
When analyzing stocks or companies to invest in, there are different ratios for gauging financial health. The price-to-book ratio (P/B) is one way to evaluate a stock's value, something that may ...
Book value is used in the financial ratio price/book. It is a valuation metric that sets the floor for stock prices under a worst-case scenario. When a business is liquidated, the book value is what may be left over for the owners after all the debts are paid.
In this segment from The Motley Fool's everything-financials show, Where the Money Is, banking analysts David Hanson and Matt Koppenheffer take a question from their mailbag about using metrics ...
Current price should not be more than 1 1 ⁄ 2 times the book value last reported. However a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 ...
P/B ratio is emerging as a convenient tool for identifying low-priced stocks that have high growth prospects.
Stock valuation is the method of calculating theoretical values of companies and their stocks.The main use of these methods is to predict future market prices, or more generally, potential market prices, and thus to profit from price movement – stocks that are judged undervalued (with respect to their theoretical value) are bought, while stocks that are judged overvalued are sold, in the ...
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