Questions tagged [book-value]

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Is the price-to-book ratio too arbitrary to be useful to investors?

Many financial portal websites show the price-to-book (P/B) ratio of companies. For example, Yahoo Finance shows this P/B ratio for TotalEnergies SE: Under IFRS (IAS 16 — Property, Plant and ...
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2 votes
3 answers
121 views

If total assets less total liabilities is positive, how should negative shareholders' equity be interpreted?

For some recently public companies, total assets minus total liabilities is a positive number, but shareholders' equity is negative. In some cases, this appears to be the result of a past sale of ...
0 votes
1 answer
178 views

Are Book Value and Shareholder Equity and Equity the same?

According to the Investopedia articles, all look to be Total assets - Total liabilities. Then are they the same? Investopedia: Book Value The book value of a company is the net difference between ...
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1 answer
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Trading for less the value of cash and cash equivalent

What means when investors says the stock trade for less of cash and cash equivalents. Some times they say trades less than book value or assets. Can you make me an example with real stock? How this is ...
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1 vote
1 answer
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Is a company's book value included in its intrinsic value?

According to value investing, the general way to find the instrinsic value of a company, and therefore its stock, is to estimate its future cash earnings in perpetuity. However, this doesn't take ...
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1 vote
1 answer
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If book value > market value, will stock price increase if a liquidation is announced?

If a company has a book value that's greater than it's market value, will its stock price jump if it's announced that the company will be liquidated?
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0 votes
1 answer
247 views

Metal companies trading below book value

Is there a reason why metal companies, like Tata Steel and SAIL trade at such low prices compared to their book value? Even the industry P/B seems to be low. What am I missing?
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3 votes
0 answers
87 views

What determines the value/price of an ETF [duplicate]

An ETF is a collection of shares packaged into a single tradeable equity. But since the marketvalue of an ETF unit is determined by market forces, what impact does the change in value of an individual ...
2 votes
0 answers
95 views

P/E & P/B of stocks purchased by Warren Buffett

I am looking for data about Warren Buffett's famous purchases. For e.g. when Warren Buffett purchased stock of Coke, American Express, Moody's & other of his long term purchases what was the P/...
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1 answer
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Book Value From Price/Book

Yahoo Finance gives the Price/Book and I'm guessing that Book is book value? I'm trying to get the Book Value from this equation, so is the below equation correct: Book Value = Price divided by ...
3 votes
3 answers
349 views

Value of mother-in-law cottage for purposes of will

Let's say there's the following scenario. A couple who are homeowners and parents of three adult children build a small, one-story detached mother-in-law cottage (500 sq. ft.) with kitchen and ...
7 votes
1 answer
381 views

Why are Bank of America and Citi trading so far below book value?

In 2008, a famously wealthy man bet big on Bear Sterns, citing that it was absurd that it was trading below book value. That man is now only slightly wealthy. The lesson was that you should trust book ...
4 votes
4 answers
3k views

How come we can find stocks with a Price-to-Book ratio less than 1?

I was wondering, if there is such a stock, why isn't everyone getting it as there is supposedly no risk. For instance, a stock like NYSEARCA:VDE has Price to Book: 0.78. Div yield: 1.99. Growing net ...
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2 answers
318 views

How to measure the cost/value of an Asset in the Financial Statement

I am currently working on my own Financial Statements. I have several blogs and derive considerable income from it then i decided to put all the assets and liabilities in the books. My problem is ...
3 votes
1 answer
1k views

What prices are compared to decide a security is over-valued, fairly valued or under-valued?

The Capital Asset Pricing Model (CAPM) for asset i is E(R_i) = R_f + \beta_{i} (E(R_m) - R_f) It can be used for asset pricing We can compare the expected/required rate of return, E(R_i), ...
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6 votes
3 answers
25k views

How to calculate stock price (value) based on given values for equity and debt?

If a company has $80 million in equity and $20 million in debt, this means that total firm value = D + E = $100 million. Am I then right to assume that if there are 1 million shares outstanding, then ...
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7 votes
4 answers
745 views

Correct calculation for determining real business book value per share?

I'm trying to calculate the real value of a business and, as an example, I picked Netflix. From their latest financial statements I can see that: Assets value is: $3,065,709,000 Liabilities value ...
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4 votes
2 answers
6k views

If a stock is selling for less than book value, is the company headed for bankruptcy?

A company's book value is the worth of all their assets. If its stock value is less than its book value, does that mean its business is worthless and bankruptcy is imminent? This is a followup to my ...
7 votes
6 answers
5k views

What could cause a stock to trade below book value?

A company's book value is the worth of all their assets. What would cause a stock to trade below book value?