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Price to book ratio

Price to book ratio concervative method

Description

Price to book ratio shows the company’s shares value, comparing market value with its’ book value. Data to calculate this ratio is collected from balance sheet and stock market bulletin.

Norms and limitations

In general there are no norms for this ratio.

However a simple explanation (but not the only one, and sometimes not even the most trustworthy one) of the ratio’s value might be that a lower P/B ratio could mean that the stock is undervalued, while a higher values could mean it’s overvalued. Of course this ratio might vary depending on the industries.

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