P/B & ROE

Discussion in 'Tutorials, lessons, examples and training' started by Hue Tran, Oct 1, 2016.

  1. Hue Tran

    Hue Tran New Member

    Hello everyone
    I'm struggling to understand P/B ratio. I read that if P/B <1, it can mean that the value of a company is exaggerated or company did not utilise its assets effectively in generating return. I don't understand how a company can exaggerated its assets. Moreover, normally, investors usually combine P/E ratio and ROE ratio. Why do they use these 2 ratio while ROE tell how a company use equity to create its return, not tell how a company use it assets to generate its return.
     

Share This Page