UK Accounting Glossary
Because the value of assets shown in the accounts does not necessarily reflect either the market value of its assets, or their value to the company (which depends on what effect they have on future cash flows), the Price-to-Book Value ratio is not widely used.
Price-to-Book Value is most often useful with sectors in which the value of a company depends largely on what assets it owns and those assets are accurately recorded in the accounts. These sectors include investment trusts and property-based companies.
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This glossary post was last updated: 23rd March 2020.