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Book Value & PBR Simplified
Book value is the value of company's net assets after reducing all the liabilities
(PBR)Price to book value is a ratio between company's share price & its book value
PBR is part of every fundamental analyst's checklist
1/n
#StockMarket
Book value is the value of company's net assets after reducing all the liabilities(PBR)Price to book value is a ratio between company's share price & its book valuePBR is part of every fundamental analyst's checklist1/n
#StockMarket
BV & PBR Simplified
BV is calculated as
Total assets - Total liabilities / number of outstanding shares
Book value can be higher or lower than market value of the company depending its financial position
Market value is the value of share price of the company
2/n
BV is calculated asTotal assets - Total liabilities / number of outstanding shares
Book value can be higher or lower than market value of the company depending its financial positionMarket value is the value of share price of the company2/n
BV & PBR Simplified
PBR compares company's market value to its book value
PBR varies from sector to sector
(i.e - A good PBR for one industry might be poor for another)
PBR below 1 considerd as value opportunity by long term investors
3/n
#StockMarket #Fundamentals
PBR compares company's market value to its book valuePBR varies from sector to sector(i.e - A good PBR for one industry might be poor for another)
PBR below 1 considerd as value opportunity by long term investors3/n
#StockMarket #Fundamentals
BV & PBR Simplified
PBR below 1 doesn't mean undervalued always
Lower PBR also reflects the company's inability to grow better than market expectations
High growth companies or sector leaders generally have high PBR as investors pay high premium to these companies
4/n
PBR below 1 doesn't mean undervalued alwaysLower PBR also reflects the company's inability to grow better than market expectationsHigh growth companies or sector leaders generally have high PBR as investors pay high premium to these companies 4/n
BV & PBR Simplified
#investing check points
Buy
High PBR-High ROE as investors willing to pay higher
BuyLow PBR-High ROE as investors ignoring it
Avoid/Research more incase
Low PBR-Low ROE as it could be a value trap
End of Thread
Thanks & RT if u have Learned
#investing check points
BuyHigh PBR-High ROE as investors willing to pay higherBuyLow PBR-High ROE as investors ignoring itAvoid/Research more incaseLow PBR-Low ROE as it could be a value trap
End of Thread
Thanks & RT if u have Learned
