Summary of Damodaran Video Price to Book Ratios

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Summary of Damodaran Video Price to Book Ratios
According to Aswath Damodaran’s video “Session 17: Book Value Multiples,” a company’s variation is established by approximating the book value equity of a company and operating capital. The book value multiples vary in different companies, which leads to companies trading below, close or above book value due to the relationship between their market value and book value.
According to Damodaran, two multiples arise from the relationship between a business’s market value and its book value. The price-to-book ratio is the market value of equity to the book value of equity and the multiple to cover broader measures, whose value is consistently calculated.
Global distribution is another multiple that determines the book variation. Across the globe, markets have similarities and differen...