Price to Tangible Book Value - PTBV


DEFINITION of 'Price to Tangible Book Value - PTBV'

A valuation ratio expressing the price of a security compared to its hard, or tangible, book value as reported in the company's balance sheet. The tangible book value number is equal to the company's total book value less the value of any intangible assets. Intangible assets can be such items as patents, intellectual property, goodwill etc. The ratio is calculated as:

Price to Tangible Book Value (PTBV)

BREAKING DOWN 'Price to Tangible Book Value - PTBV'

In theory, a stock's tangible book value per share represents the amount of money an investor would receive for each share if a company were to cease operations and liquidate all of its assets at the value recorded on the company's accounting books. As a rule of thumb, stocks that trade at higher price to tangible book value ratios have the potential to leave investors with greater share price losses than those that trade at lower ratios, since the tangible book value per share can reasonably be viewed as about the lowest price a stock could realistically be expected to trade at.

  1. Franchise Factor

    The measurement of the impact on a company's price-earnings (P/E) ...
  2. Intangible Asset

    An asset that is not physical in nature. Corporate intellectual ...
  3. Net Tangible Assets

    Calculated as the total assets of a company, minus any intangible ...
  4. Book Value

    1. The value at which an asset is carried on a balance sheet. ...
  5. Price-To-Book Ratio - P/B Ratio

    Price to Book Ratio (P/B Ratio) is a ratio used to compare a ...
  6. Tangible Asset

    Assets that have a physical form. Tangible assets include both ...
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  1. What's the difference between book and market value?

    Book value is the price paid for a particular asset. This price never changes so long as you own the asset. On the other ... Read Full Answer >>
  2. Can working capital be depreciated?

    Working capital as current assets cannot be depreciated the way long-term, fixed assets are. In accounting, depreciation ... Read Full Answer >>
  3. Do working capital funds expire?

    While working capital funds do not expire, the working capital figure does change over time. This is because it is calculated ... Read Full Answer >>
  4. How much working capital does a small business need?

    The amount of working capital a small business needs to run smoothly depends largely on the type of business, its operating ... Read Full Answer >>
  5. What does high working capital say about a company's financial prospects?

    If a company has high working capital, it has more than enough liquid funds to meet its short-term obligations. Working capital, ... Read Full Answer >>
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    Working capital, or total current assets minus total current liabilities, can affect a company's longer-term investment effectiveness ... Read Full Answer >>

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