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What is P/B Ratio (Price-to-Book)?
The ratio of a stock's market value to its book value; it shows how the company is priced relative to its assets.
ExampleA stock with a P/B of 0.8 trades below its book value, a potential value investing opportunity.The figures in the example illustrate the concept; they are not current market data.
Related terms
P/E Ratio (Price-to-Earnings)The ratio of a stock's price to its annual earnings per share; the multiple the market assigns to the company.EquityThe net value that belongs to shareholders, left after subtracting liabilities from a company's total assets.Return on EquityNet income divided by equity; it shows how efficiently management uses shareholders' capital.Value StockShares of a company thought to trade below its intrinsic value, at low multiples.
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Frequently asked questions
What is P/B Ratio (Price-to-Book)?
The ratio of a stock's market value to its book value; it shows how the company is priced relative to its assets.
What is P/B Ratio (Price-to-Book) called in Turkish?
In Turkish financial reporting and news, P/B Ratio (Price-to-Book) is called PD/DD (Piyasa Değeri / Defter Değeri).
Which concepts are related to P/B Ratio (Price-to-Book)?
The concepts most often mentioned together with P/B Ratio (Price-to-Book) are P/E Ratio (Price-to-Earnings), Equity and Return on Equity.
More terms in Fundamental analysis
Active ManagementAlpha (α)ArbitrageAsset AllocationBalance SheetBear MarketBeta (β)BondBull MarketCapital Expenditure (Capex)Cash FlowCorrelationDilutionDiscount RateDiscounted Cash FlowDiversificationDividendDividend YieldEarnings Per ShareEarnings ReleaseEarnings SurpriseEnterprise Value (EV)EV/EBITDAFair ValueGross Profit MarginGrowth StockHigh-Frequency Trading (HFT)Income StatementInsider TradingInternal Rate of ReturnInvestment InstrumentsLeverageLiquidityMargin CallMarket CapitalizationNet Profit MarginOpen PositionPortfolioReturn on AssetsSharpe RatioShort PositionSpreadStop-LossStop-Loss OrderVolatilityWeighted Average CostWeighted Average Cost of Capital