Price to Book Calculator is a tool that measures a company's market price in relation to its Book Value
- Price To Book Ratio:
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- What does Price-To-Book Ratio mean?
- The Price-To-Book Ratio denotes how much equity investors are paying for each dollar in net assets. The book value is located on a company's balance sheet under the name "stockholder equity". It represents the total amount that would be left over if the company liquidated all of its assets and repaid all of its liabilities
- Formula
- Price-To-Book Ratio = Stock Price / Book Value per share
- Example
Balance Sheet for Company ABC
(Year ending December 31, 2010)Assets Cash 1,000 Accounts Receivable 500 Inventory 500 Liabilities Accounts Payable 500 Current Long-Term Debt 500 Total Current Liabilities 1,000 Long Term Debt 500 Total Liabilities 1,500 Owners' Equity 500 According to the formula:-
- Book value: 2,000 - 1,500 = 500
- Book value per share: 500 / 100 = $5
- P/B ratio = $6 / $5 = 1.2
History
- Jun 11, 2018
- Tool Launched
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