Price To Tangible Book Value Formula

This ratio is calculated by dividing the latest price close by tangible book value per share.

Price to tangible book value formula. The price to tangible book value ptbv is a valuation ratio expressing the price of a security compared to its hard or tangible book value as reported in the company s balance sheet. The formula for the price to tangible book value is. How to calculate tangible book value with real companies.

Let s break that down a little more. The price to book ratio formula sometimes referred to as the market to book ratio is used to compare a company s net assets available to common shareholders relative to the sale price of its stock. The company also recorded 15 000 000 of tangible book value last year.

P tbv current market price tangible book value per share. Price to book value rs 100 rs 30. This ratio gives an idea of whether an investor is paying too much for what would be left if the company went into liquidation as it represents the hard assets of the company.

The price to book ratio formula is calculated by dividing the market price per share by book value per share. Price to book value 3 33. The firm s tbv is 23 8 million.

Price to book ratio market price per share book value per share for example a stock with a pvb ratio of two means that we pay 2 for every 1 of book value. The formula for price to tangible book value. Alternatively book value can be calculated as the sum total of the overall shareholder equity of the company.

Price to tangible book value share price tangible book value per share for example let s assume that company xyz has 10 000 000 shares outstanding which are trading at 3 per share. 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.