Thread by @MarketScientist

Book Value & PBR Simplified📒

🔵Book value is the value of company's net assets after reducing all the liabilities
🔵(PBR)Price to book value is a ratio between company's share price & its book value
🔵PBR is part of every fundamental analyst's checklist📝

1/n
#StockMarket

BV & PBR Simplified📒

🔵BV is calculated as
Total assets - Total liabilities / number of outstanding shares
🔵Book value can be higher or lower than market value of the company depending its financial position
🔵Market value is the value of share price of the company

2/n

BV & PBR Simplified 📒

🔵PBR compares company's market value to its book value
🔵PBR varies from sector to sector
(i.e - A good PBR for one industry might be poor for another)
🔵PBR below 1 considerd as value opportunity by long term investors

3/n
#StockMarket #Fundamentals

BV & PBR Simplified📒

🔵PBR below 1 doesn't mean undervalued always
🔵Lower PBR also reflects the company's inability to grow better than market expectations
🔵High growth companies or sector leaders generally have high PBR as investors pay high premium to these companies
4/n