This ratio refers to state that the investors are willing to spend $48.42 billion, for $8.4 billion in equity (net assets).

In simple terms, they are agreeable to spend $5.76 for each $1 in net assets.

You need to think on why are they willing to spend so much?

There can be many numbers of reasons:

1. The net assets of the company can be lot more than what they are willing to spend, this is because the value of the company’s assets which are used for estimating its equity are based on the purchase price. Similar to the idea, where the value of the house you purchase can increase in value, the assets of the company can be actually worthy of more than what is paid for them.
2. A firm can make significant profits from the assets it possesses, thereby making it worthy of paying more for the company rather than for the complete value of its assets. The lower the ratio of the market cap to its equity, the lower will be the price that the investors will have to pay for a part of these assets.

Repeated research by expert financial analysts have given way to the fact that the P/E Ratio of a company is very significant for the industrial and commercial enterprises; however, the market cap to equity ratio is considered to the more appropriate for those companies which are in the real estate industry.

Note: These ratios are pretty negligible when it comes to assessing the status of young companies; the value of the start up companies is judged by their capability and not by their achievements.

Mirabilis, a well known example, the stocks were sold for $400 million, regardless of the company not having any profits or significant assets.