To calculate PTBV, the number of shares outstanding is divided by the company's tangible book value. The result is a company-specific multiple that expresses the market's opinion of a company's worth relative to its tangible assets. For example, a company with 10,000 shares outstanding and a tangible book value of $200,000 would have a PTBV of 50 (10,000/200,000).

PTBV is an important indicator when evaluating stocks, since a relatively high ratio suggests that the stock is trading at an optimistic price and may be overvalued, while a relatively low ratio suggests that the stock is trading at a depressed price and may be undervalued. However, investors should not use PTBV as the only metric to judge a stock's potential, since important factors such as profitability or expected growth are not taken into consideration. Also, the high level of debt or changes in book value should be taken into account before investing.

Another important aspect of the PTBV calculation is that it does not consider the current market values of a company's tangible assets. Instead, it is based on the historical cost of these assets, which could be more or less than their current values. This means that PTBV can be an inaccurate measure at times, since it may not reflect the current value of the company's assets. For example, if a company is using outdated machinery or technology, its tangible assets will not be worth as much as their original cost, making the PTBV too high.

Overall, PTBV is a useful metric for evaluating stocks, and investors should take it into account when deciding whether to buy or sell a particular stock. It is important for investors to compare it to other metrics such as Price to Earnings ratio or Cash Flow ratio to get a better understanding of a company's financial health and prospects. Additionally, investors should consider any potential changes in the market value of a company's tangible assets, as well as the company's overall financial situation before investing.