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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (62247)7/27/2019 5:51:07 PM
From: bruwin   of 78802
 
P/Bk is, as we know, Price of a stock divided by the Book Value per share of the stock.

What is "Book Value" ? Primarily it's Total Assets - Total liabilities .....



Some will bring "Intangible Assets" into the mix.

But when will a shareholder benefit from "Book Value" ? Only when a company is liquidated and its Net Assets get distributed between the current shareholders.

But how sure can one be that the Assets, especially the Fixed Assets, will sell for what they are shown on the Balance Sheet ? And much the same goes for the realized Liabilities.

So what then is the point of comparing the current share price of a company with a Book Value per share number that may, or may not, be what is shown at some point in the future ?

But for those who wish to continue to use a P/Bk ratio, that's your choice ......
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