The formula to calculate the Market to Book Ratio (MBVR) is:
\[ MBVR = \left( \frac{MV}{BV} \right) \times 100 \]
Where:
The market to book ratio is a financial metric used to compare a company's market value to its book value. It is calculated by dividing the total market value by the total book value and then multiplying by 100 to express it as a percentage. This ratio helps investors understand how much they are paying for a company's assets compared to its book value.
Consider an example where:
Using the formula to calculate the Market to Book Ratio:
\[ MBVR = \left( \frac{500000}{250000} \right) \times 100 = 200\% \]
This means that the market to book ratio for this example is 200%.
