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What is the price to book ratio?

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Uploaded by on Oct 22, 2010

The price-to-book value ratio is calculated by dividing the current share price by its book value (all fixed and current assets minus current and long-term liabilities) per share (book value divided by the total number of shares in issue).

For more investment advice visit: http://www.moneyweek.com

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  • thevulgurvblogger - for the year to 27th February 2010 on the balance sheet the net assets total is £14,681m. Apologies for the fact the video doesn't use the 2011 number - £16,623m. At some point I will update it but it was shot last year before that data was available. Also note the share price is out of date too however that doesn't alter the principles being demonstrated.

    ! Hope that helps. Tim.

  • where are you getting your information?, I'm on the tesco balance sheet now and I can't see any numbers even close to 14 thousand million?

  • whats a good website for buying and selling stocks? something trust worthy that that would be good..im 18 and i want to get involved in stocks (just start off with lower cost stuff to get the hang of it and gradually move up) so if someone can give me a good reliable website to buy/sell stocks that would be greatly appropriated PLEASE THUMB THIS UP SO PEOPLE STARTING OFF LIKE ME CAN SEE THE REPLY'S TO THIS POST

  • Thanks a ton Tim :)

  • JFJjBoy - yes a low price book is no guarantee of a bargain. However it's a useful starting point especially combined with a decent dividend yield and a low p/e ratio (see my other videos!). Cheers. Tim.

  • But when the price to book is below 1, could it also be a bad sign? In other words, could it mean that the company isn't prosperous at all? Thanks

  • really helpful......need more

  • Very good video - sets out very clearly how this ratio is constructed.

    Much appreciated.

  • thanks again, looking forward for more

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