Valuation

Price / Book

P/B

What you pay vs. what the company owns on paper

Definition

The Price-to-Book ratio compares a stock's market value to the company's net assets (assets minus liabilities) as recorded on its balance sheet. A P/B below 1.0 means you can theoretically buy the company for less than its accounting value of assets. It's most meaningful for asset-heavy industries like banks, real estate, and manufacturing.

Stock Price ÷ Book Value Per Share

Typical range

1-3x for most industries; banks often trade at 0.8-1.5x

See it in a Brief