Price to book value ratio

Japanese: 株価純資産倍率

PBR is an index showing how many times the market capitalization of a company as assessed by the market is greater than its accounting liquidation value (shareholder's equity), and can be calculated by dividing the stock price by the net assets per share (shareholder's equity). Because the denominator of PBR is net assets, it is difficult to use it as an investment measure for a company's short-term stock price fluctuations, and it also does not easily reflect future profit growth potential, making it problematic to use it as a standalone investment measure. However, since a PBR level of 1 is generally considered to be the lower limit of a stock price, it is effective in estimating the lower limit. Furthermore, it is also effective as a complementary measure when the price-earnings ratio (PER) becomes abnormal. It is also known as PBR (Price Book-value Ratio).

Source: E-Consultant IPO Glossary, a company specializing in IPO support Information

Japanese:

PBRは当該企業について市場が評価した時価総額が、会計上の解散価値(株主資本)の何倍であるかを表す指標であり、株価を一株当たり純資産(株主資本)で割ることで算出できる。PBRは、分母が純資産であるため、企業の短期的な株価変動に対する投資尺度になりにくく、また将来の利益成長力も反映しにくいため、単独の投資尺度とするには問題が多い。但し一般的にはPBR水準1倍が株価の下限であると考えられるため、下値を推定する上では効果がある。更に、PER(株価収益率)が異常値になった場合の補完的な尺度としても有効である。別名、PBR(Price Book-value Ratio)という。

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