P/B Ratio (Price-to-Book Ratio)
Share price compared to the company's net asset (book) value per share.
What it means
The P/B ratio measures a stock's market price against its book value, which is the value of its assets minus liabilities. It is especially useful for asset-heavy businesses like banks and insurers.
Formula
P/B = Share Price ÷ Book Value Per Share
Example
A bank trading at $50 with a book value of $40 per share has a P/B of 1.25.
What is a good P/B Ratio?
A P/B under 1 can indicate an undervalued stock, or a troubled one. Value investors often look below 1.5, but capital-light tech companies routinely trade far higher because their value is not on the balance sheet.
See it on real stocks
Every stock analysis page shows P/B Ratio alongside the other key metrics: