| computingPB {stockAnalyst} | R Documentation |
Calculates Price to Book Value (PB) Multiple as trailing PB or GGM based PB.
Description
The ratio of market price per share to book value per share (PB), like PE, has along history of use in valuation practice as discussed by Graham and Dodd in 1934 (as cited in Jerald E. Pinto, 2020).In the measure of value in the PB denominator (book value per share) is a stock or level variable coming from the balance sheet. (Book refers to the fact that the measurement of value comes from accounting records or books, in contrast to market value.) Analysts use PB because book value is a cumulative balance sheet amount, book value is generally positive even when EPS is zero or negative. An analyst can generally use PB when EPS is zero or negative, whereas P/E based on a zero or negative EPS is not meaningful.
Usage
computingPB(PB = c("trailing", "GGM"), BV0, currentShPrice, ROE, g, r)
Arguments
PB |
character vector. |
BV0 |
number. |
currentShPrice |
number. |
ROE |
number. |
g |
number. |
r |
number. |
Details
According to information provided by Jerald E. Pinto (2020), the method computingPB is developed for computing Price to Book Value (PB) Multiple as trailing PB or GGM based PB for the values passed to its six arguments. Here, PB is character string, either trailing or GGM , currentShPrice is current Share Price , BV0 is initial Book Value,ROE is return on equity, g is sustainable growth rate under the Gordon growth model, and r is required rate of return on equity.
Value
Input values to six arguments PB, currentShPrice, ROE,BV0, g, and r.
Author(s)
MaheshP Kumar, maheshparamjitkumar@gmail.com
Examples
computingPB("trailing", currentShPrice=81.23,BV0=49.67,ROE=0.12,g=0.07,r=0.10)
computingPB("GGM", currentShPrice=81.23,BV0=49.67,ROE=0.12,g=0.07,r=0.10)