What is the role and significance of the price to book ratio?

1) Net worth is the main basis for determining the direction of the market. If the embedded net asset value per share of a listed company is high and the price per share is not high, that is, the lower the price-to-book ratio, the higher the investment value. On the contrary, the investment value is smaller, but when judging the investment value, it is necessary to consider the market environment at that time, the company's operating conditions, and profitability.

and other factors. 2) The price-to-book ratio can be better reflected"If you give something, you get something back"It can help investors find which listed company can get higher output with less input, and for large investment institutions, it can help them identify investment risks. Here it is important to point out:

The price-to-book ratio is not suitable for speculation, improving profitability.

3) The price-to-book ratio can be used for investment analysis. Net assets per share.

is the value of the asset itself, which is measured at cost, and the price per asset is the present, which is the market.

The result of the previous transaction. When the market price is higher than the value, the quality of the company's assets is better and has development potential, otherwise, the asset quality is poor and there is no development prospect. The market price of high-quality ** exceeds the net assets per share by a lot, and generally speaking, the price-to-book ratio of 3 can establish a better company image.

The market price is less than the net assets per share**, just like the commodity that sells for less than the cost"Processed products"。Absolutely"Processed products"The question is whether the company will turn around in the future, or whether it can improve its profitability through asset restructuring after the acquisition, which is the ratio between the market price and the net assets per share, and the lower the ratio, the lower the risk.

4) The role of the price-to-book ratio is also reflected in the fact that it can be used as a reference standard for determining the initial level of new issuance. If the premium issuance method is issued, it is necessary to consider determining the premium range according to the average investment potential of the market, and the average price-earnings ratio of various similar prices can be used as a reference standard.

Fourth, the general trend: if the ** falls sharply on the same day, it will be even worse to break the position, and don't chase if there is a limit.

Under normal circumstances, the psychological impact of **breaking** on the main force and chasing the disk is also huge, the determination of the main force to pull up is weakened accordingly, and the follow-up disk also stops chasing up, and the main force often has no choice but to ship immediately the next day.

When **in the band**, there are more opportunities for the daily limit, and there are more opportunities overall, so you can be bold in chasing the daily limit; When the ** band is weak, we should be especially careful and try to focus on ST shares, because ST shares and ** may go in reverse, and the other 5% increase will not cause too much selling pressure. If the trend is unclear during the consolidation, it is mainly based on the ** pattern, the morning and evening limit time, and the time-sharing chart performance.

Fifth, the first limit is better, don't chase the second limit in a row.

The reason is that because the profit market is too large in the short term, selling pressure may occur. Of course, this is not a certainty, and the leading stocks in the bull market or the stocks with great good news can be exceptional.

Price-to-book ratio: can help identify investment risks.

The price-to-book ratio (PBR) is the ratio of the stock price per share to the net assets per share. The price-to-book ratio can be used for investment analysis, generally speaking, the lower the price-to-book ratio, the higher the investment value, and conversely, the lower the investment value; However, when judging the value of the investment, it is also necessary to consider the market environment at that time, the company's operating conditions, profitability and other factors.

The price-to-book ratio [is calculated as: price-to-book ratio = (p bv) i.e. per ** price (p) net assets per share (book value)

**Net value is: the total of the company's capital, capital reserve, capital community chest, statutory provident fund, arbitrary provident fund, undistributed surplus and other items, which represents the rights and interests enjoyed by all shareholders, also known as net assets. The amount of net assets is determined by the operating conditions of the joint-stock company, the better the operating performance of the joint-stock company, the faster its assets will appreciate, the higher the net worth, and therefore the more equity the shareholders have.

When the valuation is valued by the price-to-book ratio pricing method, firstly, the issuer's net assets per share should be calculated based on the net assets after review; Secondly, the valuation price-to-book ratio is formulated based on the average price-to-book ratio of the secondary market, the issuer's industry situation (the price-to-book ratio of companies in the same industry**), the issuer's operating conditions and its net asset returns, etc.; Finally, the valuation is determined based on the product of the valuation price-to-book ratio and the net assets per share.

Scope of application. The price-to-book ratio is particularly important when evaluating high-risk companies and companies with large amounts of physical assets.