PRICE TO BOOK (PB) RATIO
\pɹˈa͡ɪs tuː bˈʊk pˌiːbˈiː ɹˈe͡ɪʃɪˌə͡ʊ], \pɹˈaɪs tuː bˈʊk pˌiːbˈiː ɹˈeɪʃɪˌəʊ], \p_ɹ_ˈaɪ_s t_uː b_ˈʊ_k__ p_ˌiː_b_ˈiː__ ɹ_ˈeɪ_ʃ_ɪ__ˌəʊ]\
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Undervalued and Overvalued stocks are determined by stock analysts by using the price to book ratio. Firms that have a significant proportion of fixed assets are also valued using the PB ratio. It is determined by multiplying the book value of the assets and the market value of outstanding stock.
By Henry Campbell Black
Word of the day
tinctura quininae ammoniata
- A preparation made by dissolving quinin sulphate in alcohol [Br. Ph.].