Price-to-book ratio: Comparing Market Price with Accounting Book Value
Price-to-book relates a share's market price to the accounting equity behind each share. Its interpretation depends strongly on how the business holds and records assets.
Use the Price-to-book ratio Calculator to enter your own figures and compare the result with the worked example below.
Price-to-book ratio formula
P/B = Market price per share ÷ Book value per share
Worked example
| Item | Example value |
|---|---|
| Price per share | 50 USD |
| Book value per share | 20 USD |
| Price-to-book ratio | 2.5 |
These are illustrative inputs, not current prices, rates or recommended targets. Where a currency is shown, keep all comparable money amounts in the same currency; conversion examples identify the two sides separately.
How to interpret the result
Book value is not a guaranteed liquidation value. Businesses with large unrecorded intangible value may not compare well with asset-heavy businesses.
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Method and further reading
The example follows the FinMathly calculator method. For broader background, see Investor.gov: Introduction to investing. The background resource may use jurisdiction-specific terms; it does not replace the assumptions of this calculator.
Featured photograph: Pexels.