market to book

market to book

A ratio comparing the market price of a firm's common stock with the stock's book value per share. Essentially, the market to book ratio relates what the investors believe a firm is worth to what the firm's accountants say it is worth according to accepted accounting principles. A low ratio indicates investors' belief that the firm's assets have been overvalued on its financial statements. Also called price-to-book-value ratio.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
References in periodicals archive ?
Table 5 shows the 36-month buy-and-hold return by size, market-to-book ratio, and both size and market to book ratio categorizes.
Other independent variables are, initial returns (3 dummy variables), control variables, such as underwriter's ranking, firm size and market to book ratio at the end of second year after IPO.
Unlike market to book ratio, firm size is relevant to explain long-run performance.
Internet firms exhibit strong short-run positive momentum and a long-term price reversal after controlling for the change of operating performance, firm size, and market to book ratio.