What Is Book Value and the P/B Ratio?
Book value and the price-to-book (P/B) ratio are classic value-investing measures. They tell you what a company is worth on paper and how much the market is paying relative to that.
Book value
Book value is a company's total equity — assets minus liabilities — the net worth that would belong to shareholders if the company were wound up at the values on its books. Book value per share divides that by the number of shares.
The P/B ratio
P/B = share price ÷ book value per share. A P/B of 1 means the market values the company at exactly its book net worth; above 1 means investors expect it to earn more than its assets suggest; below 1 can signal a bargain — or a troubled business the market has written down.
When P/B is (and isn't) useful
P/B works well for asset-heavy businesses like banks and manufacturers, where the balance sheet reflects real value. It's less meaningful for asset-light businesses (software, services) whose value is in people and intangibles, not on the balance sheet. Note that a company with negative equity has no meaningful P/B — it's left blank rather than shown as a misleading negative.
Finding it
P/B appears alongside P/E, ROE, and the other ratios on each stock page and via the ratios endpoint.