Which of the following is the ratio of share price to stockholder equity as measured on the balance sheet?
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A. B. C. D.A
The ratio of share price to stockholder equity as measured on the balance sheet is known as the "Price to Book Value Ratio" or PBV ratio.
A. Price to Book Value Ratio: This ratio measures the value that investors are willing to pay for each dollar of net assets on the balance sheet. It is calculated by dividing the market price per share by the book value per share. The book value per share is calculated by dividing the stockholder's equity by the total number of outstanding shares.
B. Price to Sales Ratio: This ratio compares the market price per share to the company's sales per share. It is used to evaluate the company's valuation and growth potential. The lower the ratio, the more attractive the investment opportunity.
C. Leverage Ratio: The leverage ratio measures the amount of debt a company has relative to its equity. It is calculated by dividing the company's total debt by its equity. This ratio helps investors evaluate a company's financial risk.
D. Debt Coverage Ratio: The debt coverage ratio measures a company's ability to cover its debt obligations with its earnings. It is calculated by dividing the company's earnings before interest, taxes, depreciation, and amortization (EBITDA) by its interest and principal payments.
Therefore, the correct answer to the question is A. Price to Book Value Ratio.