Fundamentals & valuation
What is P/B ratio?
Also called: Price to book
Hinglish mein padhein: P/B ratio kya hota hai?
Price-to-book compares the share price with the company's book value (net assets) per share.
P/B is most useful for banks and asset-heavy businesses, where book value reflects what the company actually owns.
A P/B below 1 means the market values the company below its accounting net worth — a bargain, or a sign the assets are doubted.
Related terms
- Book valueBook value is a company's total assets minus total liabilities — shareholders' equity on the balance sheet.
- P/E ratioThe price-to-earnings ratio divides the share price by earnings per share. It shows how many rupees investors pay for each rupee of annual profit.
- ROE (Return on equity)ROE is net profit divided by shareholders' equity. It shows how much profit the company makes on the money shareholders have invested.