Price to Book Value

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New Companies
Company  P/BV  Country Industry
TMK OAO1.40RussiaBasic Materials
Vipshop Holdings6.20ChinaConsumer Services
MercadoLibre Inc.29.20USAConsumer Services
L&T Finance Holdings4.50IndiaFinancials
Novorossiysk Commercial Sea Port4.30RussiaIndustrials
TAL Education Group26.80ChinaConsumer Services
Europlan PAO1.00RussiaConsumer Services
Kruk S.A.4.40PolandIndustrials
Kernel Holding1.30PolandConsumer Goods
CD Projekt SA14.40PolandConsumer Goods
Sihuan Pharmaceutical Holdings Group2.10ChinaHealth Care
Kansai Nerolac Paints9.30IndiaIndustrials
Philips Lighting NV1.80NetherlandsIndustrials

Price/Book-Value ratio, P/BV or P/B, is a financial ratio used to compare the current market price of a company with its book value. The calculation can be done in two ways, but the result should be the same both ways.

In the first way, the market capitalization of the company can be divided by the total book value of the company in its balance sheet. The second way, using values per share, is to divide the current share price of the company's book value per share (ie book value divided by the number of shares outstanding).

The P/BV considered only the recognized accounting value. In this case, the unrealized appreciations, as well as the unrealized losses are not included. Particularly in investment and real estate companies, there is often distorting values. Furthermore, when valuing firms, cash-flows and earnings are the main amounts considered.

However, Price to Book Value gives a reference of how the company is using the resources initially given by investors and how they had managed the company.

Price to Book Value

Book value of a firm is calculated starting with the net assets value of the company and deducting all the liabilities. This way we would obtain the total book value of the company. If we divide this amount with the number of shares, we will obtain de Book Value per share.

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