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Market-to-book ratio = market capitalization / book value. Investors can use the market-to-book ratio to determine whether a stock is over or undervalued. A high ratio indicates overvaluation, while a low ratio indicates undervaluation. The market-to-book ratio is also called the price-to-book (P/B) ratio.
The Market to Book Ratio, or Price to Book Ratio, is used to compare the current market value or price of a business to its book value of equity on the balance sheet.
The book-to-market ratio helps investors find a company’s value by comparing the firm’s book value with its market value. A high book-to-market ratio might mean that the market is valuing...
Market-to-Book Ratio ≈ 1.33 A market-to-book ratio of 1.33 suggests that investors are valuing XYZ Corp at 1.33 times its book value, indicating moderate confidence in the company’s asset ...
The market to book ratio, also known as the price-to-book ratio (or P/B ratio), measures a company’s market capitalization relative to its book value of equity (BVE), which is the recorded value of its shareholders’ equity for bookkeeping purposes.
Market to book ratio = market value of share/ book value per share. Market to book ratio = market capitalization/ total book value. It can be interpreted in two ways: if the ratio is less than one, it refers to an undervalued stock which is a good investment as the stock's price increases.
The market to book ratio offers insights into how the market values a company compared to its net asset value. This ratio helps investors make informed decisions about capital allocation by indicating whether a stock is undervalued or overvalued relative to its book value.