High Price to Book Ratios – Proper Interpretation and Evaluation

With stock investing, one of the valuation ratios used is the price to book ratio.  It identifies the spread between book value and market value for a share of stock.  As the spread increases the ratio increases.  A good example is Coca-Cola. Its price to book ratio hovers in the 11 range.  Coca-Cola is a Dow Jones Industrial top 30 stock.