To
calculate price to book ratio, take the
book value per share and divide by the
last reported close.
For
example: If a company's close price was
$10 and the book value per share was $2,
then the price to book ratio would be
5 (10/2=5). A price to book ratio is similar
to P/E in the respect that it can also
be calculated using individual stocks
or market indexes like the S&P.
It
is important that investors using price
to book value ratio understand book value
and its limitations. Limitations in book
value also directly apply to price to
book ratio.
Historical and current end-of-day data provided by Interactive Data Corp. and subject to terms of use. Fundamental data supplier: Mergent
Dow Jones Industrial Average is copyright Dow Jones & Company, Inc.
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