Price to Book value

Introduction

Price to book value measures the enterprise value of the company. It is considered to be more stable than P/E ratio in a volatile market.

Formula: Index market capitalization/ Gross book value or net-worth

where

Index market capitalization of the Index constituents is the sum total of the outstanding equity shares or units considered for index computation multiplied by the last traded price of each index constituent adjusted for factors such as free-float, capping factor etc. depending upon the index methodology; and

The equity capital and the reserves & surplus (networth) reported by each index constituent in the annual financial report (standalone financials) are cumulated and adjusted for factors such as free-float, capping factor etc. depending upon the index methodology to arrive at the gross book value.