Book Value Formula How to Calculate Book Value of a Company?
The term “book value” is derived from accounting lingo, where the accounting journal and ledger are known as a company’s books. The figure of 1.25 indicates that the market has priced shares at a premium to the book value of a share. The ratio may not serve as a valid valuation basis when comparing companies from different sectors and industries because companies in other industries may record their assets differently. As a result, a high P/B ratio would not [...]