Market to Book (Price to Book) Ratio Template
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Market to Book (Price to Book) Ratio Template
This market to book (price to book) ratio template allows you to calculate the Market/Book ratio using the market capitalization and the net book value.
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The Market to Book ratio (or Price to Book ratio), is a financial valuation metric used to evaluate a company’s current market value relative to its book value. The market value is the current stock price of all outstanding shares, while the book value is the amount that would be left if the company liquidated all of its assets and repaid all of its liabilities. The book value equals the net assets of the company and comes from the balance sheet. In other words, the ratio is used to compare a business’s net assets that are available in relation to the sales price of its stock.
The Market to Book formula is:
Market Capitalization / Net Book Value or Share Price / Net Book Value per Share
where,
Net Book Value = Total Assets – Total Liabilities
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Additional Questions & Answers
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In order to become a great financial analyst, here are some more questions and answers for you to discover:
- What is Financial Modeling?
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- What is Sensitivity Analysis?
- How Do You Value a Business?
