Price-to-book Ratio - Deepstash
Price-to-book Ratio

Price-to-book Ratio

Another metric useful for evaluating some types of stocks is the price-to-book ratio.

How to calculate?

  1. Assets-Liabilities = Book value
  2. Book value/Outstanding shares = Book value per share
  3. Share price/book value per share = Price-to-book ratio

It is useful when evaluating banks and other financial institutions that carry a number of assets on their balance sheets. 

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