EVERYTHING ABOUT THE P/B RATIO AND HOW IT CAN BE USED UPON STOCK ANALYSIS

- Links to social media accounts; https://www.instagram.com/matrich_investing/?hl=en https://www.facebook.com/Matrich-Investing-104068614639938/ https://twitter.com/MatrichInvesti1?s=09 WHAT IS THE P/B RATIO ? This is a ratio that is used to compare share prices and the book value per share by looking at how large the market price of a company is in comparison to it’s book value per share. It is found by taking the share price of a company and dividing it by it’s book value per share This ratio is used to compare companies that are in the same economic sector by taking the average ratio and comparing it to individual companies that are in the same sector This ratio is also used by investors in finding companies that have high growth in profits and shareholder’s equity while still having it’s shares sold at very low prices If the result of this ratio is less than 1 then that means that the company is underpriced but if the result of this ratio is greater than 1 then that means that the company is overpriced CHALLENGES BEHIND USING THE P/B RATIO This ratio is invalid for companies with negative Book Value Per Share It’s not suitable for comparing companies in different countries IT’S FORMULA 𝑺𝒉𝒂𝒓𝒆 𝑷𝒓𝒊𝒄𝒆 /𝑩𝒐𝒐𝒌 𝑽𝒂𝒍𝒖𝒆 𝑷𝒆𝒓 𝑺𝒉𝒂𝒓𝒆 #investing #wealth #shares #bonds #income #success #investors #capital #dividends #shareprice #ownership #business #stocks #companies #tanzania

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