please explain price to book ratio and how it's difference from price to earning

Business & Finance
Tutor: None Selected Time limit: 1 Day

please explain price to book ratio and how it's difference from price to earning. they sound like the same thing

Apr 20th, 2015

Book ratio is based off of the book value of the firms equity. It takes book value of shareholders equity divided by number of outstanding shares, rather than market value divided by number of shares to get current price.Thus, it is a historical value, not market value like the price to earnings ratio uses.

Apr 20th, 2015

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