Price-To-Book Ratio - P/B Ratio

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Dictionary Says

Definition of 'Price-To-Book Ratio - P/B Ratio'

A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.

Also known as the "price-equity ratio".

Calculated as:

Price-To-Book Ratio (P/B Ratio)
 
Investopedia Says

Investopedia explains 'Price-To-Book Ratio - P/B Ratio'

A lower P/B ratio could mean that the stock is undervalued. However, it could also mean that something is fundamentally wrong with the company. As with most ratios, be aware that this varies  by industry.

This ratio also gives some idea of whether you're paying too much for what would be left if the company went bankrupt immediately.

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Articles Of Interest

  1. Using The Price-To-Book Ratio To Evaluate Companies

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  2. Analyze Investments Quickly With Ratios

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  3. Digging Into Book Value

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  4. Book Value: How Reliable Is It For Investors?

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  5. Fundamental Analysis: A Brief Introduction To Valuation

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  6. How Buybacks Warp The Price-To-Book Ratio

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  7. Ratio Analysis Tutorial

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  8. Investment Valuation Ratios: Price/Book Value Ratio

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