Hi, everybody. Now, let's talk about the PB ratio. PB ratio is the ratio of stock price per share to book value per share. Let's define book value per share as BPS for short. Book value per share means the book value of equity per share. It is computed by dividing book value of equity by total number of shares the company issued. That is PB ratio is equal to stock price divided by book per share, BPS. Equity means the money invested in the company by shareholders, including founder, angel and venture capitalists. In contrast, liabilities is the money the company borrowed from banks, suppliers and various lenders. Next, PS ratio is price to sales ratio and it is equal to the share price divided by sales per share. Sales per share is sales divided by outstanding number of shares. You may wonder why PB ratio or PS ratio is needed. Why there is PE ratio? As you know, there are very few startups making any profits. That is most the start ups have negative earnings, then you cannot apply PE ratio to estimate a value for startups, then you can estimate the value of startups using price to book equity or price to sales ratios. The PB ratio is useful for funds with substantial tangible assets. Suppose you find that the average PB ratio of airline industry is 3 and book value per share is 10, then the estimated value of equity is $30 per share, which is the product of PB ratio 3 and book value $10 dollars per share. If Korean Air's book value of equity is $1 billion, the company is worth $3 billion, which is the product of PB ratio of 3 and book value of $1 billion. Next, PS ratio is the ratio of stock price per share to sales per share. As it is described, PS ratio is useful when a company has no earnings yet and it is also useful, if it is reasonable to assume that the firms will maintain similar margins in the future. Suppose you find that the average PS ratio of IOT industry is 1.5 and sales per share is 20, then the estimated value of equity is $30 per share, which is the product of PS ratio 1.5 and sales per share of 20. If your startup's sales is $2 million, your company is worth $3 million, which is the product of PS ratio of 1.5 and sales of $2 million. Even though multiple method looks easier to use, it has limitations. Since comparable forms were not identical, their multiples would not match precisely. The differences in these multiples are most likely due to differences in their expected future growth rates, profitability, risk, cost of capital and differences in accounting conventions between companies or countries. That is an important short coming of multiple method is that it does not take into account important differences among firms. Therefore, when valuing a firm using multiples, we should narrow a set of comparables used to adjust for these differences. However, narrowing the set of comparables does not help us determine if an entire industry is overvalued.