Price To Tangible Book Value Formula

Companies use the price to book ratio p b ratio to compare a firm s market capitalization to its book value.

Price to tangible book value formula. Tangible book value total assets total liabilities intangible assets value goodwill 97 366 53 125 7 789 12 706 23 746 million. Price to tangible book value what is the definition of p tb. The firm s tbv is 23 8 million.

Price to tangible book value share price tangible book value per share for example let s assume that company xyz has 10 000 000 shares outstanding which are trading at 3 per share. The formula for price to book value is the stock price per share divided by the book value per share. To calculate the tangible book value per share malcolm finds that the firm s number of shares outstanding is 2 000 000 million.

This ratio gives an idea of whether an investor is paying too much for what would be left if the company went into liquidation as it represents the hard assets of the company. The company also recorded 15 000 000 of tangible book value last year. Let s break that down a little more.

Price to book value market price per share book value per share. Alternatively book value can be calculated as the sum total of the overall shareholder equity of the company. This ratio is calculated by dividing the latest price close by tangible book value per share.

P tbv current market price tangible book value per share. It s calculated by dividing the company s stock price per share by its book value per. The price to book ratio formula sometimes referred to as the market to book ratio is used to compare a company s net assets available to common shareholders relative to the sale price of its stock.

The price to tangible book value ptbv is a valuation ratio expressing the price of a security compared to its hard or tangible book value as reported in the company s balance sheet. Formula to calculate book value of a company book value formula calculates the net asset of the company derived by total of assets minus the total liabilities. How to calculate tangible book value with real companies.