What is price-to-book ratio? Definition, formula, how to use it - Business Insider

  • 📰 BusinessInsider
  • ⏱ Reading Time:
  • 60 sec. here
  • 2 min. at publisher
  • 📊 Quality Score:
  • News: 27%
  • Publisher: 51%

日本 ニュース ニュース

The price-to-book ratio is a way to determine if a company's stock price accurately reflects its financial value

The price-to-book ratio is a metric that analyzes a company's shares against its balance sheet — to see if the stock is over- or undervalued.The price-to-book ratio measures a stock price against a company's book value — its fundamental worth.

But how do you tell? One method is to look at a company's price-to-book ratio — or P/B ratio for short. It's a quick metric that evaluates the market price of a stock and can be used to compare it to others in a similar space. The P/B ratio may signal whether the per-share price is reasonable, lower than it should be, or if it's pie-in-the-sky high.The price-to-book ratio expresses a company's stock share price in relation to its book value per share .

Now, finally, you can determine the book value per share. That's also simple math: Divide the book value from Step 1 into the number of outstanding shares on a particular date .Divide the share price by the BVPS. Voilà! There's your P/B ratio. Some analysts say a P/B ratio of less than 1 indicates that a stock is undervalued and, everything else being equal, it may be poised for a rise.

That's one reason the P/B ratio is a tool to be used in conjunction with others — "one of many indicators of relative valuation," according to Solomon Tadesse, who heads North American equity quantitative research at Société GénéraleExample of the price-to-book ratio

 

コメントありがとうございます。コメントは審査後に公開されます。

thanks for this news

このニュースをすぐに読めるように要約しました。ニュースに興味がある場合は、ここで全文を読むことができます。 続きを読む:

 /  🏆 729. in JP

日本 最新ニュース, 日本 見出し

Similar News:他のニュース ソースから収集した、これに似たニュース記事を読むこともできます。

Stock investing strategy, new PE ratio for a unique market: Leuthold - Business InsiderA Wall Street firm tweaked the Shiller PE ratio to create a superior gauge of the strongest stock-market returns — and broke down why the beloved metric won't cut it anymore Judgment begins in the United States. There was an American prophecy. It should be distinguished from all sins into a holy life. Repent. Please listen to this broadcast. 회개와거룩함사역회 MegaWednesdayExpo
ソース: BusinessInsider - 🏆 729. / 51 続きを読む »

Small-cap stocks: Definition, examples, and evaluation - Business InsiderBusiness Insider tells the global tech, finance, markets, media, healthcare, and strategy stories you want to know. good
ソース: BusinessInsider - 🏆 729. / 51 続きを読む »