Price-to-Book Ratio also called P/B ratio, is a financial valuation tool used to evaluate whether the stock a company is over or undervalued by comparing the price of all outstanding shares with the net assets of the company. It’s a calculation that measures the difference between the book value and the total share price of the company.
Enterprise Value is a business valuation calculation that measures the worth of a company by comparing its stock price, outstanding debt, and cash and equivalents in the event of a company sale. In other words, it’s a way to measure how much a purchasing company should pay to buy out another company. It is also called the takeover price because it is the amount of money required to purchase 100 percent of a business and thus take it over.
Investors are always seeking ways to compare the value of stocks. The price-to-sales ratio utilizes a company's market capitalization and revenue to determine whether the stock is valued properly. This ratio is widely used because it states the valuation of a company in context of one the easiest to understand financial metric (i.e. revenue).
How does a company decide whether it is fulfilling its expected targets or not? Revenue is an important indicator of the success of any company. Revenue is one of the most important figures seen by the investors and traders to analyze the financial health of a company. Revenue is also referred as a top line of a company's income statement.
Net profit is an important indicator of company's success. Net profit is a measure of the fundamental profitability of a company after accounting for all costs and taxes.