Musings on Markets

FEBRUARY 18, 2025

With these characteristics, the accounting balance sheets for these companies will be identical right after they start up, and the book value of equity will be $60 million in each company. The first is that if markets are efficient, the price to book ratios will reflect the quality of these companies.

Equity 52

Equity Book Value Marketability Start-ups 52

IVSC

FEBRUARY 7, 2022

Searching for stocks with low price-to-book ratios was a good indication of a potential bargain. However, book values are no longer so informative as lots of intangibles are missing from the balance sheet, and some intangibles that are on the balance sheet, including many acquired intangibles and goodwill, are very hard to interpret.

Discounted Cash Flow 252

Discounted Cash Flow Intangible Assets Marketability Price to Book 252

Musings on Markets

JULY 17, 2023

In my second data update post from the start of this year , I looked at US equities in 2022, with the S&P 500 down almost 20% during the year and the NASDAQ, overweighted in technology, feeling even more pain, down about a third, during the year.

Marketability 98

Marketability Risk Premium Start-ups Treasury 98

Valutico

MAY 19, 2025

Asset write-downs or impairments: A reduction in the book value of assets or goodwill when they are deemed overvalued. Conversely, sectors commanding higher multiples, like Software, Biotechnology, and Healthcare, frequently benefit from strong growth prospects, higher margins, or scalable, technology-driven business models.

EBITDA 52

EBITDA Enterprise Value Capital Structure EBIT 52

Valutico

MAY 6, 2024

Asset-based methods like Adjusted Book Value, Liquidation Value, and Replacement Cost consider the worth of tangible assets. These multiples are applied to target company’s latest financials such as revenue, earnings and book value of equity to arrive at an estimate of enterprise value or equity value.

Discounted Cash Flow 52

Discounted Cash Flow Precedent Transaction Analysis Weighted Average Cost of Capital Comparable Company Analysis 52

Andrew Stolz

JANUARY 12, 2022

Book value is the value attributable to shareholders in case the company sells all its assets and repays its liabilities (also called liquidation value). A price-to-book ratio of less than 1x indicates that the market values the net assets less than the balance sheet suggests.

EBIT 52

EBIT Price to Book Book Value Liquidation Value 52

Equilest

AUGUST 6, 2023

Key Financial Ratios: Ratios such as Price-Earnings Ratio (P/E), Price-to-Book Ratio (P/B), and Debt-to-Equity Ratio provide valuable insights into the company's performance and market position. Liquidation Value: This method assesses the value of the company's assets if they were to be sold off in a liquidation scenario.

Discounted Cash Flow 40

Discounted Cash Flow Business Valuation Precedent Transaction Analysis Comparable Company Analysis 40