Search results
Results From The WOW.Com Content Network
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.
The price-to-book ratio (P/B) is a commonly used benchmark comparing market value to the accounting book value of the firm's assets. The price/sales ratio and EV/sales ratios measure value relative to sales. These multiples must be used with caution as both sales and book values are less likely to be value drivers than earnings.
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 ...
P/B ratio is emerging as a convenient tool to identify low-priced stocks that have high-growth prospects. 6 Stocks With Attractive Price-to-Book Ratio Worth a Look Skip to main content
Put another way, a stock priced below the Graham Number would be considered a good value, if it also meets a number of other criteria. The Number represents the geometric mean of the maximum that one would pay based on earnings and based on book value. Graham writes: [2] Current price should not be more than 1 1 ⁄ 2 times the book value last ...
For premium support please call: 800-290-4726 more ways to reach us
One good example of decreasing asset value is a personal computer. An example of where book value does not mean much is the service and retail sectors. One modern model of calculating value is the discounted cash flow model (DCF), where the value of an asset is the sum of its future cash flows, discounted back to the present.
X 4 = ratio of market value of equity to book value of total liabilities. Adds market dimension that can show up security price fluctuation as a possible red flag. X 5 = ratio of sales to total assets. Standard measure for total asset turnover (varies greatly from industry to industry). Altman found that the ratio profile for the bankrupt group ...