If we are given a balance sheet and are asked to calculate P/B on the exam do we automatically make the adjustments that we learned in SS 7 or do you think the question will spell it out for us? For example, eliminating goodwill.
i’d look for hints that ask you to make adjustments…if not…just go with listed equity
I think there would be some sort of hint to make adjustments if that’s what they want to see. Ex. from an analyst’s perspective what should the adjusted P/B ratio.
I think by it’s definition the p/b would be without adjustments.
adjustments definitely have to be made …
I am sticking to what CFA wants me to do in that question!!
That is what I am asking anish. Will the question indicate anything or is it assumed that adjustments need to be made (since we are trying to become analyst and all that…).
Take it from a repeater: I don’t remember any question where there was ambiguity on the facts. Too many poorly written Schweser questions have jaded us. I wouldn’t lose any sleep over this one.
Agree with G2-11