what is the book to market ratio 
the book to market ratio is one indicator of a company s value the ratio compares a firm s book value with its market value a company s book value is calculated by looking at the company s historical cost or accounting value a firm s market value is determined by its share price in the stock market and the number of shares it has outstanding which is its market capitalization nono flores investopediaunderstanding the book to market ratiothe book to market ratio compares a company s book value with its market value the book value is the value of assets minus the value of the liabilities the market value of a company is the market price of one of its shares multiplied by the number of shares outstanding the book to market ratio is a useful indicator for investors who need to assess the value of a company the formula for the book to market ratio is the following book to market common shareholders equity market cap text book to market frac text common shareholders equity text market cap book to market market capcommon shareholders equity 