Price to Tangible Book Value

The Price to Tangible Book Ratio, or P / TB Ratio, is a financial ratio used to compare a company's Tangible Book Value to its current market price and is a key metric for value investors. This is calculated as the Current Price divided by the latest annual Tangible Book Value Per Share. This figure is computed from the latest available interim accounts.

Stockopedia explains P / TB

Theoretically, P/TB represents the hard assets of the company, i.e. the amount of money that shareholders would receive for each share owned if the company were to liquidate its operations. Some ‘intangible' assets have questionable value - for example a company might have overpaid for an acquisition and conservative value investors sometimes prefer to remove them when valuing a company.

We exclude preferred shares in the calculation of Tangible Book Value. As with most ratios, it varies a fair amount by industry (companies that require more infrastructure capital will usually trade at P/TB ratios much lower than, for example, consulting firms).

A higher P/TB may be a sign that a company is overvalued.. However, Tangible Book value may be substantially different from market value, especially in high-tech, knowledge-based and other industries whose primary assets are not tangible.

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The 5 highest P / TB Stocks in the Market

TickerNameP / TBStockRank™
LON:INDIIndus Gas0.0955
LON:SOUSound Energy0.1437
LON:IX.I (X) Net Zero0.1762
LON:GEMDGem Diamonds0.1752
LON:BWNGN Brown0.2143