Price-to-Book Ratio Calculator (P/B)
The price-to-book ratio compares a stock's market price to the net asset value recorded on the company's balance sheet. This calculator works in two modes: enter a stock price and book value per share directly, or use the balance sheet inputs (total assets, total liabilities, and shares outstanding) to have book value per share calculated for you. The calculator returns the P/B ratio, the derived book value per share, and the implied market capitalisation versus book value comparison. All figures come from the balance sheet section of SEC 10-K and 10-Q filings, which are freely searchable on EDGAR. Total assets and total liabilities appear on the face of the balance sheet; shares outstanding appear on the cover page. P/B is most informative for banks, insurers, and asset-heavy industrials. For software or services companies, consider pairing it with P/E and EV/Revenue multiples to get a fuller valuation picture.
Formulas
P/B ratio = Market price per share / Book value per share
Book value per share = (Total assets - Total liabilities) / Shares outstanding
Premium to book = (P/B - 1) x 100%
How to use this calculator
- Enter the current stock price per share.
- Enter book value per share directly if you have it from a financial data provider.
- Alternatively, leave book value blank and enter total assets, total liabilities, and shares outstanding from the balance sheet to have book value calculated automatically.
- Read the P/B ratio and market-to-book premium from the output panel.
Frequently asked questions
What does the P/B ratio mean?
The price-to-book ratio compares a company's market capitalisation to its book value (net assets). A P/B of 2.0 means investors are paying two dollars for every dollar of net assets on the balance sheet. It is most useful for asset-heavy businesses such as banks, insurers, and industrial companies.
What does a P/B below 1.0 mean?
A P/B below 1.0 means the market values the company at less than its stated net assets. This can signal deep value, distress, or that significant asset write-downs are expected. Value investors such as Benjamin Graham historically screened for P/B below 1.0 as a margin-of-safety indicator.
For which industries is P/B most useful?
P/B is most meaningful for banks, insurance companies, real estate investment trusts, and capital-intensive industrials, where assets and book value are central to the business model. It is less useful for technology or services businesses, where intangible assets and human capital dominate and may not appear on the balance sheet.
What are the limitations of book value?
Book value reflects historical cost less accumulated depreciation, not current market value. Intangible assets such as brand, patents, and customer relationships are often excluded or understated. Goodwill from acquisitions can inflate book value. These factors mean book value is an imperfect proxy for true intrinsic value.
How does P/B differ from P/E?
P/E measures price relative to earnings (income statement), while P/B measures price relative to net assets (balance sheet). P/E is a flow measure; P/B is a stock measure. Both are valuation multiples but capture different aspects of a business. Using both together gives a more complete picture than either alone.
Official sources
- SEC EDGAR company filings search: www.sec.gov/cgi-bin/browse-edgar.
- SEC guide to financial statements: Beginner's Guide to Financial Statements.
Reviewed by the CalculatorHub team, edited by James Graham, 14 June 2026. See our methodology.