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Fundamental Analysis

P/B Ratio

Definition

Price-to-Book ratio - stock price divided by book value per share.

Understanding P/B Ratio

P/B Ratio is an important concept in stock market trading. Understanding this term will help you make better trading decisions and communicate effectively with other traders and financial professionals.

Key Points

  • Basic Definition: Price-to-Book ratio - stock price divided by book value per share.
  • Category: This term is commonly used in Fundamental Analysis
  • Relevance: Essential knowledge for traders operating in Indian stock markets

Practical Example

When trading on NSE or BSE, you'll encounter p/b ratio regularly. For example, understanding this concept helps you analyze market conditions, make informed decisions, and manage your trading positions effectively.

Related Concepts

To fully understand p/b ratio, you should also be familiar with related trading concepts. Check out the related terms in the sidebar for a comprehensive understanding of this topic.

Related Terms

  • Market CapitalizationThe total market value of a company's outstanding shares (share price × shares outstanding).
  • P/E RatioPrice-to-Earnings ratio - stock price divided by earnings per share.
  • EPSEarnings Per Share - company's profit divided by outstanding shares.
  • ROEReturn on Equity - net income divided by shareholder equity, measuring profitability.
  • ROCEReturn on Capital Employed - measures how efficiently a company uses its capital.
  • Debt to Equity RatioTotal debt divided by shareholder equity, measuring financial leverage.

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