Dec 01, 2019 · Definition of Book Value. The book value of a company is calculated by estimating the total amount a company is worth if all the assets are sold and the liabilities are paid back. The book value of a stock = book value of total assets – total liabilities. The book value calculation in practice is even simpler.
Dec 23, 2019 · In value analysis, though price to earnings (P/E) and price to sales (P/S) are most preferred by investors, the underrated price-to-book ratio (P/B ratio) is also an easy-to-use valuation.
Price-to-Book Ratio. To a value-seeking investor, a company that trades for a P/B ratio of 0.5 is attractive because it implies that the market value is one-half of the company s stated book value. In other words, the market is offering the stock of net assets (net assets = assets - liabilities) for 50 cents.
The book value of a stock is theoretically the amount of money that would be paid to shareholders if the company was liquidated and paid off all of its liabilities.
Nov 30, 2019 · I screened for North American companies with market value under Billion and over million. We capped the price to book ratio at 0.75. This gave me a large number of stocks, most of which were junk as those companies carried huge amounts of debt relative to their market values (debt bombs – the price of the stock is distressed for a reason).