What is the logical starting point for the price to book ratio PB to determine the valuation level

Asset-heavy companies and industries where the book value is very close to the market value, such companies are typical of banks (assets and liabilities are basically directly money, and bad debts are very rare after all), which means that investors can clearly see how much my investment can be worth according to a certain part of the value of the asset.

Assets and liabilities are very high and very close to the market value, as well as land, so real estate companies usually also look at the price-to-book ratio.

In addition, heavy asset enterprises such as iron and steel enterprises can also look at the price-to-book ratio, because the industry is very mature, and they basically know how much steel can be produced by how many assets, and the relationship with market value is still relatively direct.

I will also give an example that is not very applicable to heavy assets, such as R&D companies, which are all R&D funds that have been invested at the beginning but have a book value

God knows the market value, what AIDS vaccine is developed, it is not worth it, of course, if it can't be developed, it won't tell others, so usually the price-to-book ratio of high-tech companies is higher than 1 times. Not to mention the asset-light, what consulting companies, assets are tables, chairs, computers, and companies that mainly rely on people and brands are usually not applicable to the price-to-book ratio - the other type is a company that is close to asset liquidation, and if it is going to go bankrupt and reorganize, of course, we have to see how much the rest of the tattered is worth.

What is the peculiarity of China, what is the principle of preventing the loss of state assets, so state-owned enterprises usually look at the price-to-book ratio, when the corrupt state assets should be at least 1 time, when it is caught in the braid or you can say I bought a net asset value, and then how much to buy. This is the typical advantage of not looking at future profits.

First of all, what exactly does this price-to-book ratio mean? and his basic calculations. I heard this word mentioned by others before, which meant that I didn't understand it at all, but then I went to see the relevant knowledge myself.

I guess I have some understanding that the market interest rate is a valuation method that does not take into account future profitsTherefore, investors usually need to combine it with the P/E ratio。Here are some examples of the price-to-book ratio that is currently being more focused:

This type of company pays more attention to the price-to-book ratio, after all, this type of company has a certain degree of transparency. When it comes to asset-heavy companies, everyone doesn't know what they are. A typical example is a bankAll price-to-book ratios, which means investors can see clearlyHow much can I invest based on a portion of my valuable assets?

Assets and liabilities are very high, very close to market capitalization and land, so real estate companies often need to see market interest rates as well. No matter what kind of asset-light, what kind of consulting firm, the assets are desktop computers, and companies that rely mainly on people and brands are usually not suitable for the market ** ratio.

<> for state-owned enterprisesWhat are the principles for preventing the loss of state assets due to the peculiarities of our China, so state-owned enterprises usually have to look at the price-to-book ratio, when corrupt state-owned assets, when it gets caught in the braid or you can say I bought a net asset value and then how much to buy. This is the typical advantage of not looking at future profits. It is also interesting to calculate the net worth.

For example, for the same liability, 3% interest and 7% interest must not be the same.

It is financial data, mainly to see the performance of ** in the whole, and there must be a reference system to analyze the price-to-book ratio of **. For example, if the company is in its infancy, the price-to-book ratio will be lower than the market average, which is acceptable, but if a mature enterprise has a price-to-book ratio significantly lower than the market average, then there is a possibility of bankruptcy. In addition, it is not excluded that enterprises should operate artificially, make fakes, and fabricate financial reports.

It's useless, generally do the long-term will look at the price-to-book ratio or something, and now the price-earnings ratio of bank stocks The price-to-earnings ratio is very good

Price-to-book ratioPrice-to-book ratio = net assets per share per ** price (times).

The smaller the price-to-book ratio, the higher the investment value and the more supported the stock price.

Net assets per share see intrinsic value.

Answer]: C P/B Ratio Equity Net Profit Rate Dividend Payout Ratio (1 Growth Rate) (Equity Cost Growth Rate), compared with the expressions of P/E ratio and P/B ratio, it can be seen that the equity net profit margin is the unique driving factor of the P/B ratio, therefore, the net profit margin of the first delay is the key driver of the P/B ratio, so C is the answer.