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Investments glossary

Price-To-Book (P/B Ratio)

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Success and failure are both difficult to endure. Along with success come drugs, divorce, fornication, bullying, travel, meditation, medication, depression, neurosis and suicide. With failure comes failure.

— Joseph Heller

Companies use the price-to-book ratio (P/B ratio) to compare a firm’s market capitalization to its book value. It’s calculated by dividing the company’s stock price per share by its book value per share (BVPS). An asset’s book value is equal to its carrying value on the balance sheet, and companies calculate it netting the asset against its accumulated depreciation.


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