What's the inflation rate?

Inflation rate = market price/book value

If the inflation rate is greater than 1, the company's assets are less than the market value. If it is less than 1, the company's assets are greater than the market value.

A company mainly depends on its profitability, such as technology stocks (software, medicine, etc. ), and the most important thing is whether the new product is new, then the assets become unimportant and meaningless. Industrial stocks all have similar attributes.

In other companies, its assets are more difficult to estimate, so its direct value cannot be seen from the price-to-book ratio.

The only thing that is easy to estimate is pure real estate development stocks. The main assets of these companies are real estate, so their market accounts are low, or may be less than 1.

For example:

The market-to-account ratio of 0056 United Real Estate is 0.66.

0 163 The market account ratio of Emperor Group is 0.53.

On the surface, the low listing rate means that these companies have high assets, but the price-to-book ratio is low, and the assets are higher than the stock price. However, it should be noted that every event has a reason. These companies may be poorly managed and lose money every year. Their assets may be lost sooner or later, or the management's record is poor. They often reach out to shareholders for money (rights issue), and they will not give it to shareholders if they make a profit, or they are considered by shareholders to abuse power for personal gain. For example, those who make money will transfer to their own private enterprises, and those who don't make money will join.

P/B ratio is not an important data to determine the quality of a company, because high assets will only be reflected when the company is acquired or privatized, and other times the profitability and prospects of the company are the most important. Price to book value ratio (price to book value ratio):

The stock price divided by the net book value per share represents the market price of the book asset value per yuan.

Generally speaking, the lower the better. But the standard of high and low depends on different industries.

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