AuthorTopic: P/BV for software companies
bobsky
@2014-04-25 08:04:59
I am preparing for L2 CFA, and I found an explanation to a question in Schweser that I don't agree with:

The price/book ratio is best for valuing companies with small amounts of fixed assets, like software makers.

My question is: how is that true, when most assets of software companies are intangible assets, thats value is easily manipulated?

I would be thankful for explanation.
AnsariZ
@2014-06-06 12:57:50
No, I agree with you. I dont think co. like Microsoft has lot of tangible assets.

P/BVPS is motly appropriate for company with the tangible assets, specaily those who have assets like I would say like, Walmart, also banks who have lots of assets such as security vs. their deposits,or libilities.

Can you also cite the reference so I lie to look it up as in Sch notes? Thanks.

Zahoor
L II Can...

P.S: Just posted a query reg. resuming an existing practice test, I finally figured it and find my incomplete practice exam under, 'Exam Manager.'

CFA Discussion Topic: P/BV for software companies

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I am using your study notes and I know of at least 5 other friends of mine who used it and passed the exam last Dec. Keep up your great work!
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