Price to Book Ratio Calculator
The price to book ratio, written P/B, measures how a stock's market price compares to the accounting value of its equity. Book value is what would in theory be left for shareholders if a company sold every asset and paid off every liability, divided across the shares it has issued. Dividing the share price by book value per share tells you how much investors are paying for each dollar of that net worth on the books. A ratio below 1 means the market values the company at less than its stated equity, which can point to a bargain or to a business the market doubts. A ratio above 1 means investors pay a premium, usually for growth or strong returns on equity. The measure works best for asset-heavy firms such as banks, insurers and property companies, where the balance sheet captures most of the value. Enter a share price and a book value per share to see the ratio update at once. The calculation follows the standard definition explained by the US Securities and Exchange Commission on its Investor.gov education site. Every number here is computed deterministically from the formula shown below, with a worked example that reconciles exactly to the default inputs so you can check each step yourself.
The price to book ratio is share price / book value per share. A $50 stock with a book value of $25 per share has a P/B of 2.00x.
Price to book ratio formula
P/B ratio = share price / book value per share
book value per share = (shareholders equity - preferred equity) / shares outstanding
a ratio below 1 means price is below book value
a ratio above 1 means price is above book value
Divide the share price by book value per share to get the P/B ratio. The result tells you how many dollars investors pay for each dollar of the company's net equity recorded on its balance sheet. Lower ratios suggest the stock is cheap relative to its book value.
Worked example
A stock trades at 50 per share and the company reports book value per share of 25.
- P/B ratio = 50 / 25
- P/B ratio = 2.00x
The stock trades at 2.00x book value, meaning investors pay twice the accounting value of equity for each share. These are the calculator's default inputs, so the result above matches the widget exactly.
Price to book ratio at common values
This table shows the P/B ratio for a 50 share price at different book values per share.
| Book value per share | P/B ratio (price 50) |
|---|---|
| $100 | 0.50x |
| $50 | 1.00x |
| $33.33 | 1.50x |
| $25 | 2.00x |
| $20 | 2.50x |
| $16.67 | 3.00x |
Valuation concepts: US Securities and Exchange Commission, Investor.gov.
Price to book ratio calculator: frequently asked questions
What is the price to book (P/B) ratio?
The price to book ratio compares a company's share price to its book value per share. Book value is the net worth of the company on its balance sheet, total assets minus total liabilities, divided across each share. A P/B of 2 means the market values the stock at twice the accounting value of its equity. It is most used for asset-heavy businesses such as banks and insurers.
What is a good price to book ratio?
There is no universal good figure. A P/B below 1 means the stock trades for less than the accounting value of its equity, which can signal a bargain or a troubled business. A P/B above 1 means investors pay a premium to book value, often for expected growth or strong returns on equity. Compare against industry peers and the company's return on equity rather than judging the number alone.
Why does P/B work better for some companies?
The price to book ratio is most meaningful for companies whose value sits in tangible, measurable assets, such as banks, insurers and property firms. For technology or service businesses, much of the value comes from brands, software and people that do not appear on the balance sheet, so book value understates worth and the P/B ratio can look misleadingly high.
How does P/B relate to book value per share?
Book value per share is the denominator of the P/B ratio. You first calculate book value per share as shareholders equity, minus any preferred equity, divided by shares outstanding. Then you divide the share price by that figure to get the price to book ratio. If you do not know book value per share yet, calculate it first, then return here.
What is the price to book ratio formula?
P/B ratio = share price divided by book value per share. For example, a 50 dollar share price with book value per share of 25 gives a P/B of 2.00. Some analysts use the total market capitalisation divided by total book equity, which gives the same result. This calculator uses the per-share version.
Official sources
- Investing concepts and how to read valuation measures: US Securities and Exchange Commission, Investor.gov. As at 24 June 2026.
Reviewed by the CalculatorHub team, edited by James Graham, 24 June 2026. See our methodology. This is general information, not financial, tax, legal or investment advice.