Market To Book Value Ratio Formula
Market to book value ratio 20 1 00 000 1 500 000 2 000 000 1 500 000 1 33 here the market perceives a market value of 1 33 times the book value to company x.
Market to book value ratio formula. Market to book ratio formula. Market capitalization net book value. 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.
The market price per share is simply the current stock price that the company is being traded at on the open market. Market to book ratio is calculated using the formula given below. You can also calculate the market to book ratio by dividing the stock price by the book value per share.
The usage of market value ratios is varied. And some of the most important uses are as follows. You calculate it by dividing the book value by the market cap.
Book value 117892000000. Share price net book value per share. Where net book value total assets total liabilities.
Companies use the price to book ratio p b ratio to compare a firm s market capitalization to its book value. The ratio determines the market value of a company relative to. Market value ratios uses.
It s calculated by dividing the company s stock price per share by its book value per. Market to book ratio market capitalization book value. The market to book formula is.