What does a P/B ratio below 1 mean?

A P/B under 1 means the stock trades below its book value, which can indicate undervaluation, market pessimism about future prospects, or troubled assets on the balance sheet.

Which industries typically have high P/B ratios?

Asset-light industries like software and services often trade at high P/B ratios since their value comes from intangibles like intellectual property, not book assets.

P/B Ratio Calculator

The Price-to-Book (P/B) ratio compares a company's market value per share to its book value per share (assets minus liabilities, divided by shares outstanding). It helps assess whether a stock is trading above or below its net asset value.

Inputs

Results

P/B Ratio: 2.25

Try an example

Formula

P/B Ratio = Share Price / Book Value Per Share

Learn How This Works

Stock and Bond Valuation: Dividend Yield, P/E, P/B, and Bond Pricing

How dividend yield, price-to-earnings ratio, price-to-book ratio, and zero-coupon bond pricing each answer a different valuation question.

Frequently Asked Questions

Related Calculators

P/E Ratio Calculator

Calculate the price-to-earnings ratio for a stock.

Dividend Yield Calculator

Calculate a stock's dividend yield from its annual dividend and share price.

Mortgage Calculator

Estimate your monthly mortgage payment, total interest, and payoff schedule.

Loan Calculator

Calculate monthly payments for any personal, auto, or business loan.

Compound Interest Calculator

See how your savings or investments grow with compound interest over time.

Simple Interest Calculator

Calculate simple interest earned or owed on a principal amount.