Price-to-Book Ratio Calculator (P/B)
The Price-to-Book (P/B) ratio compares a stock's market price to its accounting book value per share. A P/B below 1 means the market values the firm below its net assets — a signal value investors watch closely.
Near book value — modestly priced
- 1
P/B ratio
45 ÷ 30 = 1.50 - 2
Premium over book value
(45 − 30) ÷ 30 × 100 = 50 %Positive means the stock trades above net asset value; negative means a discount.
How does this calculator work?
P/B = stock price ÷ book value per share. It measures how many times above net asset value the market prices the stock. P/B < 1 may signal undervaluation or distress; P/B 1–3 is typical for asset-heavy firms; asset-light companies often justify much higher multiples. Compare within sector, not in isolation.
Formula
How this is calculated
Book value per share (BVPS) is the accounting net worth attributable to each common share: total shareholders' equity (assets minus liabilities) divided by shares outstanding. The P/B ratio measures how many times the market is willing to pay above that accounting floor.
A P/B below 1.0 means the stock trades at a discount to its balance-sheet value — historically associated with deep-value and distressed situations. A P/B of 1–3 is common for steady, profitable businesses. Asset-light technology and consumer-brand companies often trade at P/B of 5–20 because their value lies in intangibles (brands, software, intellectual property) that the balance sheet largely excludes.
This calculator uses BVPS from the most recent published balance sheet. P/B is most informative for capital-intensive industries (banks, industrials, real estate) and less useful for intangible-heavy sectors where book value systematically understates true worth.
Frequently asked questions
It depends heavily on the industry. Banks and insurers often trade at P/B 1–2; technology firms at 5–20. A P/B below 1 is a flag worth investigating — either a bargain or a sign of structural problems. Always compare within sector and against the stock's own historical range.
P/B compares market price to accounting net assets (balance sheet), while P/E compares market price to earnings (income statement). P/B is more useful when earnings are volatile or negative; P/E when the business is primarily earnings-driven with few hard assets.
Book value relies on historical cost accounting. Intangible assets like brands, customer relationships and internally developed software are largely excluded or amortised away. This makes BVPS systematically low for modern asset-light businesses, which is why high P/B is normal for those sectors.
Also known as
TG we-Calculate Editorial Team. (2026). Price-to-Book Ratio Calculator (P/B) [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/price-to-book-ratio-calculator
TG we-Calculate Editorial Team. "Price-to-Book Ratio Calculator (P/B)." TG we-Calculate. 2026. https://we-calculate.com/calculator/price-to-book-ratio-calculator.
TG we-Calculate Editorial Team, "Price-to-Book Ratio Calculator (P/B)," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/price-to-book-ratio-calculator
@misc{wecalculate_price_to_book_ratio_calculator, title = {Price-to-Book Ratio Calculator (P/B)}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/price-to-book-ratio-calculator}}, year = {2026}, note = {TG we-Calculate} }
Did this calculator help you?