When Is Price-to-Book Not Price-to-Book?
Okay, the title above is a trick question. Price-to-book (P/B) value is always price-to-book value—but it can mean different things in different industries and, especially, in different countries. Ignoring these differences can lead to poor investment decisions. But investors can be savvier in their analysis of the numbers by systematically taking advantage of insights about local accounting principles.
Andrew Y Chin
June 17, 2011