Valuation Multiples in Banking Workout 2
- 01:11
Valuation Multiples in Banking Workout 2
Glossary
P/BV P/TNAV PE Value DriverTranscript
Okay, here we're asked to calculate the PE ratio, Price to Book Value, and Price to Tangible Net Asset Value for Wells Fargo. So if you want to calculate the PE ratio, we're going to go and grabWells Fargo's share price, and multiply that by their shares outstanding, and then we're going to divide that by the net income, we get 10.2.
Now, we're going to calculatethe Price to Book Value. So we're going to go and grab the share price and multiply that out by the shares outstanding, and then we're going to go and divide that by the value of shareholders equity, the balance sheet number, the book value of shareholders equity, and then we're going to calculate price to Tangible Net Asset Value, it's a really similar calculation. Let's go and grab the share price multiply that out by the shares outstanding, and then divide that by open bracket, let's go and grab the shareholders equity, but let's strip out those intangible assets.