Price By Book Value Formula
The book value per share is a little more complicated.
Price by book value formula. Price to book value market price per share book value per share. The formula for price to book value is the stock price per share divided by the book value per share. Price to book p b stock price per share book value per share.
Company x has a p b lower than the industry average and lower than its peer group which highlights that x might be undervalued. From there market capitalization and net book value can be calculated. Price to book value is the second most important metric in determining the fair price of a share the first being price to earnings pe ratio.
Price to book value 3 33. The book value per share is considered to be the total equity for common stockholders which can be found on a company s balance sheet. Hanya saja tidak lengkap kalau kita lewatkan rumus nilai buku per lembar saham dan pengertian price to book value menurut para ahli.
Companies use the price to book ratio p b ratio to compare a firm s market capitalization to its book value. The stock price per share can be found as the amount listed as such through the secondary stock market. Book value per share total assets total liabilities number of outstanding shares.
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. The price to book ratio formula is calculated by dividing the market price per share by book value per share. The formula to measure the price to book value is as follows.
Comparison of p b is generally done between the peer group and industry average. Maximum recommended is 1 5 times beyond which the price is not fair or reasonable. You can find this information on a company s financial statements.