The price to tangible book value is the share Price divided by the tangible book value per share. The TBVPS is calculated as follows: Common Equity less Intangibles divided by the Fully Diluted Shares Outstanding at the end of the period.
In theory, a stock's tangible book value per share represents the amount of money an investor would receive for each share if a company were to cease operations and liquidate all of its assets at the value recorded on the company's accounting books. As a rule of thumb, stocks that trade at higher price-to-tangible book value ratios have the potential to leave investors with greater share price losses than those that trade at lower ratios, since the tangible book value per share can reasonably be viewed as the lowest price at which a stock could trade.
Pr2TanBk is applicable mainly to financial and capital-intensive companies that own a relatively high proportion of hard assets and credit, as opposed to firms that engage in light manufacturing or service-oriented industries. For instance, Pr2TanBk is rather meaningless as a valuation measure in the technology sector, because much of a company's valuation derives from intellectual property, an intangible asset. An investor must also be careful with Pr2TanBk for companies that have long-held land: the land is stated at historical cost, not marked up each year on the balance sheet; and Pr2TanBk can result in a deceivingly high ratio.
Formula
Price / TanBVPS
Availability
These ratios combine data from from line item filings and factors that use prices (click here for the line-item reference). Which price is used in the calculation depends on the period. The latest close price is used for ratios that involve the latest financials, like the most recent quarter or the latest trailing twelve fiscal months (TTM). For ratios that involve older financials, like the quarter one year ago, or the TTM one year ago, the price used for the calculation is the average price during the following quarter.
Quarterly values from Income & Cashflow statements are annualized to make the resulting factor more readily comparable with 12-month factors. The annualization is done by multiplying the quarterly figures by approximately 4 (depends on the actual number of days in the period).
You can either use a prebuilt ratio or use the function to define your own.
Function
RatioName(offset,type)
offset: 0-25 (for interim) 0-10 (for annual)
type: QTR (for interim), ANN (for annual), TTM (for trailing twelve months)
For example to screen for stocks whose P/E today is less than their P/E from their previous fiscal 4 quarters enter:
PEExclXor(0,TTM) < PEExclXor(4,TTM)
The above can also be done using prebuilt ratios:
PEExclXorTTM < PEExclXorPTM
Prebuilt Ratios
Prebuilt ratios are available for these periods:
| Period | Description | Price | Line Item |
|---|---|---|---|
| Q | Recent Quarter | Close(0) | (0, QTR) |
| PQ | Prior Quarter | Avg nextQ | (1, QTR) |
| PYQ | Prior Year Quarter | Avg nextQ | (4, QTR) |
| TTM | Trailing Twelve Months | Close(0) | (0, TTM) |
| PTM | Prior TTM | Avg nextQ | (4, TTM) ** |
| A | Recent Annual | Avg nextQ | (0, ANN) |
| PY | Prior Year | Avg nextQ | (1, ANN) |
** PTM offset is 4 , not 1, since it uses interim periods