Learn / Fundamentals / Valuation / P/B Ratio
P/B = Share Price ÷ Book Value Per Share
This number compares the stock's price to the company's net assets on the books — what is left after you subtract debts from assets. In theory, that is close to what owners would get if everything were sold and debts paid.
01 Feel it first
Click buttons to add assets or debt on the stack. Book value (equity = money left for owners after debts) is what remains. Drag the red price line up or down to see how P/B moves.
02 Break the intuition
Not always. Peel the cards to see why a low P/B can be a trap — and a high P/B can be normal.
03 Explore the stack
Tap each slice. What the company owns, what it owes, and what is left for shareholders.
Everything the company owns: cash, factories, inventory, and more. This is the gross pile before debts.
With $60 of assets and $35 of debt, book value is $25 per share. P/B tells you how many times the market price sits above or below that accounting leftover.
04 Scrub the scale
Drag the P/B slider. Book value stays fixed at $25 per share while the market price moves.
Book value stays at $25 per share. Multiply P/B by $25 to get the implied price. Below 1× trades under book. Above 3× often signals assets the books do not capture.
05 Where it matters
P/B is a balance-sheet tool. Use it where the balance sheet (the list of what the company owns and owes) is the heart of the business.
06 The catch
Compare like with like. A 'cheap' software name can still trade far above an 'expensive' bank.
07 Check yourself
08 Where it breaks
Brand, research, and people rarely show at full value on the books. Book value understates many modern businesses.
Assets can stay overstated until management finally takes the hit. P/B can look low right before that charge.
If the company shut down tomorrow, factories and inventory often sell for less than the book number. You do not pocket book value in a rush sale.
When a company buys back its own shares, book equity can shrink and P/B can rise even if the business itself did not change.
See book value, market price, and sector peers for any of 70,000 stocks — then screen for deep discounts or franchise premiums.
Book value is assets minus debt — what owners would theoretically get if everything sold at stated values. You pay 1.56× that number today. Above 1× means the market expects more than what is on the balance sheet.