Quick question on P/B ratio
When calculating PB ratio, can you use the projected book value?
Also, can the book value be the total equity on the balance sheet or it has to be the book value of all outstanding shares?
When calculating PB ratio, can you use the projected book value?
Also, can the book value be the total equity on the balance sheet or it has to be the book value of all outstanding shares?
+736 | Bank of America - Juniors Strike to start Monday May 6th | 106 | 35s | |
+519 | BOFA ALREADY TRYING TO COVER UP THEIR TRACKS | 69 | 11s | |
+283 | This is a dark day for Wall Street. | 32 | 50m | |
+154 | Investment Banking US League Table YTD 2024 (FactSet) | 85 | 4h | |
+147 | Big Layoff at Barclays - 5/1/24 | 85 | 6h | |
+90 | “Americans just work harder” | 54 | 1h | |
+83 | Would comitting to ATL İB be stupid? Please give feedback. | 45 | 3d | |
+69 | Sleeping on Jefferies??? | 35 | 2s | |
+66 | A shitter's comprehensive guide to sophomore year recruiting | 8 | 55m | |
+60 | What's up with RBC nowadays? | 28 | 2s |
Career Resources
if you use projected book, you are basically doing a forward P/B ratio, which is fine, although I don't know when you'd do that. It's more likely you'd use forward EPS or forward EBITDA to get a forward Price-to-X multiple.
The second question is confusing...book value is just the value of the assets minus intangible assets (shit you can't sell). To get P/B it's [Price / (book value - liabilities)].
Some people consider book value to be tangible - intangible - liabilities, too.
It sounds like Assets - Liabilities = Equity.
So can you say that P/B is ( Price / Total Equity per Share)
It's Tangible Assets - Liabilities. For some firms that could be a huge difference. Remember, if you were going to sell your firm to the world, it can't buy goodwill or other intangible items you carry on your BS.
Qui voluptas in ad ullam aut. Eveniet consequatur unde quasi enim unde sint. Deserunt voluptate quis maiores officiis fuga. Est voluptatem ut nulla quis ipsam explicabo.
Sint eos et sapiente placeat et. Nam aspernatur corrupti deleniti mollitia consectetur rem reiciendis. Nihil quisquam earum vitae qui esse.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...