price-to-book
Market versus assets
Price-to-book is a financial ratio comparing a company's market value to its book value—what shareholders would theoretically receive if the company liquidated all assets and paid all debts.
A ratio below 1.0 suggests the stock may be undervalued; above 1.0 suggests investors expect future growth.
The bank's price-to-book ratio fell during the crisis.
Current trading price
- equityImpartial treatment or ownership value
- intrinsic valueWorth independent of circumstance
- net asset valueHoldings minus debts
- undervaluedRated below true worth
overvalued · fair value · market capitalization · asset-based · value investing · Warren Buffett · margin of safety
Standard for comparison
- cross-sectionalCut through perpendicularly
- market sentimentCollective attitude toward prices
Shares in lending institutions
- financial institutionsEntities handling monetary services
- loan portfolioAggregated debts held by lender
- write-downsFormal value reductions
- FDICFederal deposit guarantor
stress tests · Wells Fargo · regional banks · too big to fail · credit risk
market value
Current trading price
- equityImpartial treatment or ownership value
- intrinsic valueWorth independent of circumstance
- net asset valueHoldings minus debts
undervalued · overvalued · fair value · market capitalization · asset-based · value investing · Warren Buffett · margin of safety
benchmark
Standard for comparison
- cross-sectionalCut through perpendicularly
- market sentimentCollective attitude toward prices
bank stocks
Shares in lending institutions
- financial institutionsEntities handling monetary services
- loan portfolioAggregated debts held by lender
- write-downsFormal value reductions
FDIC · stress tests · Wells Fargo · regional banks · too big to fail · credit risk