What is the P/B ratio?

P/B is market value divided by net assets. It compares stock price to the book value on the balance sheet.

Quick Definition

P/B ratio = Market Price ÷ Book Value Per Share. It compares what investors pay to what the company is worth on paper. P/B below 1 may signal undervaluation.

Use this concept with tools

Inflation-adjusted Return

Nominal return vs purchasing-power return.

CAGR

Convert between annualized rate and final amount.

Compound Interest

Growth with recurring contributions and compounding frequency.

Related concepts

What is the P/E ratio?

P/E ratio = Share Price ÷ Earnings Per Share. It shows how much investors pay for each dollar of profit. A high P/E implies high growth expectations.

What is debt-to-asset ratio?

Debt-to-asset ratio = Total Liabilities ÷ Total Assets. A ratio above 70% often signals high leverage and elevated financial risk. Compare within the same industry for meaningful insight.

What does a balance sheet tell me?

A balance sheet is a snapshot: Assets = Liabilities + Shareholders' Equity. Use it to assess leverage (how much debt?), liquidity (can it pay bills?), and capital structure.