ConverterHub

Price-to-Book Ratio Calculator

Compare a stock's price to its book value.

How it is calculated

The ratio is P/B = share price / book value per share. Both are amounts in the same currency per share. Book value per share is what you get from the balance sheet: equity (assets minus liabilities, and many analysts also remove intangibles) divided by shares outstanding. The tool does not compute it for you, so you enter the figure. The result is shown with two decimals. Book value must be above zero, so a company with negative equity returns no result. A P/B below 1 means the market price is under the accounting value of net assets.

Worked example

A share trades at 45 and the book value per share is 30. P/B = 45 / 30 = 1.50. The market is paying 1.50 for every 1.00 of net assets on the books. A price of 24 against the same book value would give 24 / 30 = 0.80.

Try this example →

Common mistakes

  • Using total company equity instead of equity per share. Divide by the number of shares first.
  • Using stale book value. It changes with every quarterly report, while price changes daily.
  • Comparing P/B across very different industries. Asset-heavy firms such as banks and asset-light software firms are not comparable.
  • Treating a low P/B as automatically cheap. It may reflect assets that are worth less than their recorded value.

About this calculator

This calculator finds the price-to-book (P/B) ratio: P/B = Share Price / Book Value per Share, where book value per share is a company's total equity minus intangibles, divided by shares outstanding. A P/B under 1 can suggest a stock is trading below the accounting value of its net assets.

Value investors, equity analysts, and finance students use P/B alongside metrics like P/E to screen for undervalued stocks, and it's especially relevant for asset-heavy businesses such as banks and industrials, where book value closely tracks tangible worth. Enter the share price and book value per share to get the ratio.

Was this helpful?

You can pick up to 3 reactions.

Comments (0)

  • Be the first to comment.

Popular calculators

Loan Calculator

Monthly payment, total interest and full amortization schedule.

Percentage Calculator

Percent change, percent of, and ratio calculations.

Discount Calculator

Calculate final price, savings, and discount amount.

BMI Calculator

Body mass index from height and weight (metric or imperial).

Age Calculator

Compute your exact age in years, months and days from a birth date.

Compound Interest Calculator

Calculate the final amount and interest earned with compounding.

All Calculators