Price-to-Book Ratio (P/B)

The Price-to-Book ratio, or P/B, compares a company’s market price to its book value — the value of its assets minus its liabilities as recorded on the balance sheet. A P/B near or below 1 can suggest a stock is trading close to the accounting value of its net assets. It tends to be most meaningful for asset-heavy businesses like banks and industrials, and far less useful for asset-light companies whose value lives in brands, software, or people.