Can you define the market value to book value ratio?

Question added by Frank Mwansa , ACCOUNTING LECTURER , FREELANCER
Date Posted: 2016/05/05

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A ratio used to compare the market value of the firm with the book value.

Basically used to know whether the book value is overstated or understated.

Book to market = Book Value / Market value.

If above 1 overstated, below one understated.

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