Читать книгу Investment Banking For Dummies - Matthew Krantz - Страница 24

Putting a price tag on companies and other investments is a big part of what investment bankers do. Talk about The Price Is Right on a grand scale! Luckily, you don’t have to play Plinko and guess what companies are worth. There’s no shortage of analysis tools that investors can use to calculate the value of companies. Investment bankers use ratios, such as the price-to-earnings ratio and price-to-book ratio, discussed in Chapter 8, to value companies.

Sometimes, though, the best yardstick of a company’s value isn’t what an investment banker can calculate, but what the market will bear. Understanding how to obtain and analyze past transactions is one way investment bankers can accurately gauge the value that investors will likely put on a company. In Chapter 10, you see how investment bankers handle the process of studying past transactions, and what that means for the value of investments.