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Definition of Price to Book (P/B) Ratio

Definition: What is Price to Book (P/B) Ratio?

Price to Book ratio also called P/B ratio or market to book ratio. It compares the company’s all outstanding share price with its net assets to evaluate whether the company stock is over or underlying.

In other words, the P/B ratio used to find the difference between book value and the total share price of the company.

Definition of Price to Book (P/B) Ratio

The current stock price of all the outstanding shares is equal to market value through which the market thinks the worth of the company.

Whereas book value available on the balance sheet which is equal to the net assets of the company.

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