Market value ratios provide management with an indication of how investors view the firm's past performance and especially its future prospects.

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Market value ratios, such as Price-to-Earnings ratio and Price-to-Book ratio, are used by investors to evaluate a company's future earnings potential and growth prospects, which in turn can influence the stock price. Therefore, these ratios can provide management with insights into how investors perceive the company's past performance and future prospects.

Market Value Ratios Provide Management with an Indication of How