Nifty 50
Sensex
US Tech 100
Dow Jones
FTSE
Dax
CAC
Nikkei 225
Hang Seng
SSE Composite
TAIEX
KOSPI
Gift Nifty
Strategy Indices
Broad Market Indices
Sectoral Indices
Thematic Indices
Home
Finance GlossaryP/B Ratio (Price-to-Book)
P/B Ratio (Price-to-Book)
Definition of P/B Ratio (Price-to-Book)
The Price to Book (P/B) Ratio is a valuation metric used by investors to compare a company's current market price per share to its book value per share. The book value is the net asset value of the company (Total Assets - Total Liabilities). A low P/B ratio (e.g., below 1) indicates that the stock is undervalued, but it could also signal underlying issues with the company. A high P/B ratio indicates that the investors are willing to pay a premium for the net asset value of the company, often because of strong growth expectations.
Related Terms
Accrued Interest
An accrued interest is the interest incurred in the current accounting period but the actual interest is due to be paid or received in the next accounting period.
Broker
A broker is an intermediary between a securities exchange and investors. Only registered entities can place trades on a securities exchange. These members can be individuals or firms known as stockbrokers.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
That’s why investors must go through a broker when they want to trade or invest in stocks, ETFs, futures, options, and others.
Exit Load
Exit load is a type of premature withdrawal fee that mutual funds charge. The goal of charging an exit load is to ensure that investors think twice before exiting a fund, as premature withdrawals can affect existing investors.
Every mutual fund charges a different exit load based on the discretion of the fund manager. ETFs, liquid funds, and other debt funds typically have little to no exit load whereas equity funds do.
Every mutual fund charges a different exit load based on the discretion of the fund manager. ETFs, liquid funds, and other debt funds typically have little to no exit load whereas equity funds do.
Advance Payment Guarantee/Bond
An Advance Payment Guarantee or Advance Payment Guarantee Bond is a contract issued by a third party willing to take responsibility for fulling the terms of an agreement or payments owed by one party to another.
The guarantee could be:
The guarantee could be:
- Primary: Indemnity (fulling payments)
- Secondary: Guarantee (assuring that the outcome will be met)
Leverage In Stock Market
Leverage is a loan that a broker offers to allow traders to take up bigger positions by paying lesser capital. This feature is known as Margin Trading Facility (MTF) or simply margin funding. Leverage is often represented as a multiple like 2X, 3X, 4X, 5X and so on. For example, getting 5X leverage on a trade worth ₹1,00,000 means you’ll pay ₹20,000 and the broker will cover the rest of the ₹80,000.
Abandoned Baby Pattern
An Abandoned Baby Pattern is a type of candlestick pattern that signals the reversal of a bullish or bearish trend. It is made up of three candles, each of which varies based on the trend.
Bullish Abandoned Baby Pattern
- Candle #1: Red in color & forms during a downward trend
- Candle #2: Forms a Doji Star below Candle #1’s closing price
- Candle #3: Leads to a bullish trend & forms above the Doji Star (similar size to Candle #1)
Bearish Abandoned Baby Pattern
- Candle #1: Green in color & forms during an upward trend
- Candle #2: Forms a Doji Star above Candle #1’s closing price
- Candle #3: Leads to a bearish trend & forms below the Doji Star (similar size to Candle #1)
Invest & Trade with a Trading
Platform That's #MadeForTrade
Open your Dhan Account in minutes!
