What is PB Ratio? I Fundamental Analysis I Stock Market for Beginners I Stock Market Classes I #4

P/B Ratio explained In Hindi | Stock Market For Beginners
Price to Book Ratio or Price/Book Value

The price-to-book (P/B) ratio has been favored by value investors for decades and is widely used by market analysts. Traditionally, any value under 1.0 is considered a good P/B value, indicating a potentially undervalued stock. However, value investors often consider stocks with a P/B value under 3.0. It is important to note that it can be difficult to pinpoint a specific numeric value of a "good" P/B ratio when determining if a stock is undervalued and therefore, a good investment. Ratio analysis can vary by industry, and a good P/B ratio for one industry may be a poor ratio for another.


The Basics of the P/B Ratio
The P/B ratio compares a company's market capitalization, or market value, to its book value. Specifically, it compares the company's stock price to its book value . The market capitalization (company's value) is its share price multiplied by the number of outstanding shares. The book value is the total assets - total liabilities and can be found in a company's balance sheet. In other words, if a company liquidated all of its assets and paid off all its debt, the value remaining would be the company's book value.

So we should always check PB Ratio before investing in any company.

In this video, we have explained:
What is PB Ratio?
How to interpret Price to Book Value Ratio?
What is Book Value?
What are the advantages of Book Value?
How to analyze earnings of any company?
What is the relation between price & book value?
How to calculate book value of any company?
Why P/B ratio is important?
What are tangible assets?
How to calculate B.V. per share?
What is the formula of P/B ratio?
When is P/B ratio useful?
Why the market is ready to pay premium on Book Value?
What are appreciating/ depreciating assets?
When is Price to Book Value ratio not useful?
How to check P/B ratio online?

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Team Prashant Sharma

Disclaimer : This video is for educational purpose only and NOT a stock recommendation.