Donate to Remove ads

Got a credit card? use our Credit Card & Finance Calculators

Thanks to johnstevens77,Bhoddhisatva,scotia,Anonymous,Cornytiv34, for Donating to support the site

Beware p/b

Analysing companies' finances and value from their financial statements using ratios and formulae
OhNoNotimAgain
Lemon Slice
Posts: 767
Joined: November 4th, 2016, 11:51 am
Has thanked: 71 times
Been thanked: 147 times

Beware p/b

#340490

Postby OhNoNotimAgain » September 15th, 2020, 6:08 pm

We recommend using a composite of ratios when valuing a firm because no perfect measure of value exists. Doing so reduces the impact of each measure’s inherent shortcomings when the ratio is used in isolation.

Book value is an incomplete measure of a firm’s assets. Given the growing importance and increasing share of intangible capital in total company capital, adding measures of intangibles provides a more complete measure of firm capital.

Including intangibles when estimating a firm’s value has a greater impact on smaller companies. Mega-cap growth stocks, notably, the FANGs, still look expensive after incorporating intangibles in the value of firm capital.




https://www.researchaffiliates.com/en_u ... c665d63cda

Return to “Company Analysis”

Who is online

Users browsing this forum: No registered users and 4 guests