标题: Use of Price to book ratio for banks [打印本页] 作者: optiix 时间: 2011-7-13 16:01 标题: Use of Price to book ratio for banks
anyone know why this ratio is used for banks?作者: pacmandefense 时间: 2011-7-13 16:01
Price to book multiple is a prefered valuation metric for banks. This is because a bank needs to keep on raising fresh capital for future growth. There is a dilution effect from this. Hence one cannot project a banks earnings to perpetuity (and therfore not give a PE multiple).
Apart from PBV also look at RoE for banks.
~Hopethishelps
~Rajat
Edited 1 time(s). Last edit at Monday, September 7, 2009 at 07:25AM by PropTrader.作者: dmar 时间: 2011-7-13 16:01
varundarji, I'm not sure I agree, I don't think all the assets on a banks balance sheet are going to be liquid.作者: ftwcfa 时间: 2011-7-13 16:01
Most assets and liabilities of banks are constantly valued at MARKET VALUES....so they can be easily valued....so the banks book value is very close to its actual value....
Hope this helps作者: pogo 时间: 2011-7-13 16:01
Yeah, Varundarji, you got it 100% right!作者: btcapital 时间: 2011-7-13 16:01
Ok so why is this a better measure than looking at earnings ratios i.e. EBITDA or P/CFLO?
