Price-To-Book Ratio - P/B Ratio
- Price-To-Book Ratio - P/B Ratio
A ratio used to compare a stock's market value to its book value. It is calculated by dividing the current closing price of the stock by the latest quarter's book value per share.
Also known as the "price-equity ratio".
Calculated as:
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A lower P/B ratio could mean that the stock is undervalued. However, it could also mean that something is fundamentally wrong with the company. As with most ratios, be aware that this varies by industry.
This ratio also gives some idea of whether you're paying too much for what would be left if the company went bankrupt immediately.
Investment dictionary.
Academic.
2012.
Look at other dictionaries:
market price to book ratio — See: book value … Accounting dictionary
market price to book ratio — See book value … Big dictionary of business and management
price/book ratio — /ˌpraɪs bυk ˌreɪʃiəυ/ noun a ratio of the price of a stock to its book value … Dictionary of banking and finance
Price/book ratio — Compares a stock s market value to the value of total assets less total liabilities ( book value). Determined by dividing current stock price by common stockholder equity per share ( book value), adjusted for stock splits. Also called Market to… … Financial and business terms
price-book ratio — Compares a stock s market value to the value of total assets less total liabilities ( liability) ( book value). Determined by dividing current stock price by common stockholder equity per share> ( book value), adjusted for stock splits. Also… … Financial and business terms
price/book ratio — Compares a stock s market value to the value of total assets less total liabilities ( liability) ( book value). Determined by dividing current stock price by common stockholder equity per share> ( book value), adjusted for stock splits. Also… … Financial and business terms
price-to-book value ratio — Compares a stock s market value to the value of total assets less total liabilities ( liability) ( book value). Determined by dividing current stock price by common stockholder equity per share> ( book value), adjusted for stock splits. Also… … Financial and business terms
Market-book ratio — Market price of a share divided by book value per share. The New York Times Financial Glossary … Financial and business terms
market-book ratio — market price of a share> divided by book value per share. Bloomberg Financial Dictionary … Financial and business terms
ratio — the proportional relationship of one thing to another * * * ratio ra‧ti‧o [ˈreɪʆiəʊ ǁ ˈreɪʆoʊ] noun [countable] a relationship between two amounts that is represented by a pair of numbers showing how much greater one amount is than the other: •… … Financial and business terms
