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Monday, May 30, 2011

Market to Book Ratio Analysis & Example

Definition: Market to Book Ratio (or price book ratio, P/B) is used to measure a company's market price in relation to its book value.

Formula:
Market to Book Ratio = Market Price Per Share / Book Value Per Share
Or,
Market/book ratio = Market price per stock / Net asset value per stock
Or,
P/B ratio = Market capitalization / Book value of equity

(Note: Book Value Per Share = Book Value for

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