| Price-To-Book Ratio |
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Used to compare a stock's market value to its book value, calculated by dividing
the current closing price of the stock by the latest quarter's book value. (Book value is simply assets minus liabilities).
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A lower Price-To-Book Ratio could mean that the stock is undervalued.
But it could also mean that something is fundamentally wrong with the company. As with most ratios be aware this varies much by industry.
This ratio also gives some idea of whether you're paying too much for what would be left if the company went bankrupt immediately.
Also known as the price/equity ratio.
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