Price-to-Book Ratio (P/B) Calculator

What is P/B Ratio?

The price-to-book (P/B) ratio compares a company's market price per share to its book value per share (common shareholders' equity divided by shares outstanding). Equivalently, it is the company's market capitalization divided by its common equity. A P/B ratio below 1 implies the market values the company at less than its accounting net asset value, which can signal deep value or financial distress. P/B is most useful for asset-heavy industries like banking, insurance, and real estate, where book value closely approximates tangible worth. For technology and consumer brands, much of the value lies in software, brands and customer relationships that are largely not recorded on the balance sheet under GAAP, so P/B is typically much higher. Book value also includes goodwill from past acquisitions; price-to-tangible-book removes it. Benjamin Graham used P/B as a cornerstone of value investing.