Price to Book Ratio
Price to Book Ratio is a financial ratio used to compare company’s book value to its market value.
The calculation could be done in two ways, either for the whole company or using per share values. The calculation value is the same, nevertheless.
As other ratios, this one vary between the industries.
For example, companies in technology sectors have much bigger market than it’s book value, because of hidden assets, like intellectual property which is not reflected in books.
| Related Terms: Value Stock |
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