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The price-to-book ratio compares a company's stock price to its book value per share. A lower ratio may indicate that the stock is undervalued, while a higher ratio may suggest it is overvalued. Investors can use this ratio to assess if a stock is a good investment based on its perceived value relative to the company's assets.

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5mo ago

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What is a good price-to-book ratio and how can it be used to evaluate a company's financial health?

A good price-to-book ratio is typically considered to be below 1. It can be used to evaluate a company's financial health by comparing the market value of a company's stock to its book value, which is the value of its assets minus its liabilities. A low price-to-book ratio may indicate that a company's stock is undervalued, while a high ratio may suggest that the stock is overvalued.


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