Fundamentals

Price-to-Book Ratio (P/B)

The Price-to-Book ratio compares a company's stock price to its book value (assets minus liabilities) per share. It's particularly useful for valuing asset-heavy companies like banks and real estate firms. A P/B below 1.0 means the stock trades below book value.

Formula

P/B = Stock Price / Book Value Per Share

Related Terms

Price-to-Earnings Ratio (P/E)Price-to-Sales Ratio (P/S)

Learn More

This term is covered in the following lessons:

Price-to-Book and Price-to-Sales