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Price To Book Ratio

Price to book ratio is a comparison between a company's market value and its book value. It can be calculated either dividing market capitalization by total book value or by dividing the share price by the book value per share. The ratio should be higher than one. If not it means that a company's assets are valued by the market at less than their replacement value. This could mean that the shares are undervalued or that the company is facing very considerable problems.

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