tag:blogger.com,1999:blog-2991101600248617596.post3597690783749030886..comments2023-11-14T02:15:06.159-06:00Comments on Financial Alchemist: Understanding the Drivers of the Price to Book MultipleTurley Mullerhttp://www.blogger.com/profile/01407515956935491747noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-2991101600248617596.post-20347139817538048172010-03-15T02:10:52.956-05:002010-03-15T02:10:52.956-05:00Excellent article, this blog is great always relev...Excellent article, this blog is great always relevant postings. Congratulations! I'm from Brazil and also do operations on the financeiroDGhttp://www.digitei.comnoreply@blogger.comtag:blogger.com,1999:blog-2991101600248617596.post-59798120402347985452007-09-20T09:58:00.000-05:002007-09-20T09:58:00.000-05:00Yes that can be true- Land is recorded on the bala...Yes that can be true- Land is recorded on the balance sheet at historical cost, the price it was bought at. <BR/><BR/>Other Assets, such as buildings, factories, machines, equipment etc. depreciate because they don't last forever. But real estate does not depreciate in the sense of use. It just loses value or gains value based on demand. Yet, only when it is sold and taken off the books is the value adjusted. So, a firm could own property in bought on the cheap that has become very valuable if they were to sell, but that is not reflected on the balance sheet. Since real estate most always appreciates in the long-run, old properties are certainly understated in value.<BR/><BR/>Lambert realized that when he bought K-mart out of bankruptcy, he knew that the land was worth much more than the book value, so he was able to acquire and sell it for a big gain and pay down some debt used to buy k-mart company.<BR/><BR/>I am sure that in China, much land was bought from farmers at a low price compared to what it's worth years later. <BR/><BR/>Hidden / intangible assets not on balance sheet can result in a higher P/B if the market recognizes the value.Turley Mullerhttps://www.blogger.com/profile/01407515956935491747noreply@blogger.comtag:blogger.com,1999:blog-2991101600248617596.post-15360177450063466472007-09-20T09:45:00.000-05:002007-09-20T09:45:00.000-05:00I heard my friend said that, some of the property ...I heard my friend said that, some of the property stocks' P/B value is very high due to the land purchase price is very very low, like some China property company bought the land from farmers. is it true?肥蘇https://www.blogger.com/profile/04116427791854442237noreply@blogger.com