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Price-to-Tangible-Book Ratio

Trading Term

The price-to-tangible-book ratio compares a company’s market value with tangible common equity. Tangible book value generally excludes goodwill, intangible assets, and preferred equity.

The ratio may be useful when analyzing banks and asset-intensive companies. It is less informative for businesses whose value depends primarily on software, data, networks, brands, or intellectual property.

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