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Price-to-Book-Ratio - P/B Ratio

The price-to-book-ratio is a fundamental key performance figure for the market valuation of one company. The traditional theory of value investing claims that a share is worth the money the lower the price-to-book-ratio and that a share reaches its fair value at the price of the book value. Shares are considered a good investment when the price-to-book-ratio is at 1.5 or lower.