Price-to-Book Ratio P/B

How the stock price compares to the company's net accounting value per share.

Part of the Valuation 101 course · Lesson 7 of 14

Formula

Share Price / Book Value Per Share

What it is

The price-to-book ratio compares a company's market value to its book value, which is total assets minus total liabilities (shareholders' equity). It shows how much investors pay for each dollar of net assets on the balance sheet. A P/B below 1 means the market values the company at less than its stated net worth.

Why it matters

P/B is most useful for asset-heavy businesses such as banks, insurers, and industrials, and is a classic value-investing screen. Pitfalls: book value understates intangible-heavy or asset-light firms (software, brands), and accounting book value can diverge sharply from real economic value.

How it's calculated

Divide the current share price by book value per share, or divide total market capitalization by total shareholders' equity.

How Quintarthai uses it

P/B is shown in the Summary Key-metrics grid and the Ratios tab on a stock's company page, and can be used as a filter in the Stock Screener.

Cross-border note. IFRS (used by Canadian issuers) and US GAAP differ on items like asset revaluation and goodwill, so book value and therefore P/B are not always computed on the same basis cross-border.

FAQ

Why do tech companies have very high P/B ratios?

Their value comes largely from intangibles like software, brands, and people that the balance sheet under-reports, so reported book value is small relative to market value.

Does a P/B under 1 mean a stock is cheap?

Not necessarily; it can signal a bargain or it can signal that the market expects the assets to lose value or the company to keep losing money.

See Price-to-Book Ratio on a real company

Open any stock in Quintarthai and explore it live across the screener and company pages.

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