Price-to-Book Ratio (P/B) (market-to-book ratio) shows the ratio of a company's stock market price to its book value per share. P/B is calculated using the following formula:
$$P/B = \frac{Stock\; Market\; Price}{Book\; Value\; per\; Share}$$
This ratio is often used to compare banks and financial institutions.
Price-to-Book Ratio FAQ
What is the price-to-book ratio?
It compares a stock's market price with its book value per share.
How do you calculate it?
Divide market price by book value per share.
