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Price to Book

Price to Book compares a company’s book value to its current market price. Book value shows the portion of the company held at accounting value (not market value). It’s the company’s total tangible asset value minus its total liabilities. A low value compared to its peers could mean that the company is undervalued, and trading at a price that is very low to its real value. However, it could also mean something is fundamentally wrong with the company. Buy combining this factor with other factors that signal value we get a better valuation of a company.