easy · Financial Accounting financial-statement-analysis-ratios

A Price-to-Book (P/B) ratio of less than 1.0 typically suggests that:

1. The market values the firm's equity at less than its accounting net assets
2. The firm is highly profitable and growing its market share
3. The firm carries no debt at all anywhere in its capital structure
4. The market expects the firm to earn a return above its cost of equity capital

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