Fundamental Analysis
P/B Ratio (Price-to-Book)
A stock's share price divided by its book value per share — compares market value to accounting net worth.
Book value is a company's total assets minus total liabilities — its accounting net worth. P/B compares the market's valuation to that net worth: a P/B of 1 means the market values the company exactly at its book value; well above 1 means the market is pricing in intangible value (brand, growth prospects, market position) beyond the balance sheet.
P/B is used most often for asset-heavy businesses like banks and financials, where book value (largely loans and capital) is a more meaningful anchor than for asset-light businesses like software companies.