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P/B Ratio (Price-to-Book)

Share price divided by book value per share.

The price-to-book ratio compares a company's market value to its book value (shareholders' equity). A P/B below 1.0 suggests the stock trades below net asset value — common for banks and capital-intensive industries. Growth companies often have P/B well above 1.0 because much of their value is intangible (brand, IP, moat).

Formula
P/B=PriceBook Value per Share\text{P/B} = \frac{\text{Price}}{\text{Book Value per Share}}

Related Terms

P/E Ratio

Share price divided by earnings per share — how much you pay per dollar of profit.

P/S Ratio (Price-to-Sales)

Market cap divided by revenue.

Return on Equity (ROE)

Net income divided by shareholders' equity — the return to equity investors.