Market To Book Value Per Share Formula
Market capitalization book value.
Market to book value per share formula. The formula is represented as 2 market to book ratio formula market capitalization total book value. In contrast to book value the market price reflects the future growth potential of the company. Market capitalization price per share total shares outstanding on the other hand book value is the value as per the books of accounts of a given company.
The market price per share is simply the current stock price that the company is being traded at on the open market. 1 market to book ratio formula market value of stock book value per share on the other hand it can also be calculated by dividing the market capitalization by the total book value or tangible net worth of the company. Market to book ratio formula.
Here s the formula of price to book value price to book value ratio market price per share book value per share. Either of the above formula can be used for calculating the ratio. When compared to the current market value per share the book value per share can provide information on how a company s stock is valued.
Market price per share book value per share. Market capitalization net book value. It can be understood as the shareholder s equity capital or the total assets of a company less total liabilities intangible assets and preferred share capital.
The book value per share is a little more complicated. Book value per share is also used in the return on equity formula or roe formula when calculating on a per share basis. The price to book value ratio p b formula is also referred to as a market to book ratio and measures the proportion between the market price for a share and the book value per share.
A firm s market value is. The market to book ratio is calculated by dividing the current closing price of the stock by the most current quarter s book value per share. Share price net book value per share.