Price to Book Ratio Calculator
Calculate P/B ratio to evaluate stock valuation and identify undervalued opportunities
Calculate P/B Ratio
Current market price per share
Total number of shares outstanding
From balance sheet - total equity
Preferred stock equity (enter 0 if none)
P/B Ratio Results
Book Value per Share
$74.68
Valuation Assessment
Reasonable valuation relative to book value
Calculations
Book Value: $261262M - $30063M = $231199.0M
Book Value per Share: $231199.0M ÷ 3095.8M = $74.68
P/B Ratio: $80.1 ÷ $74.68 = 1.07x
Example: JPMorgan Chase
Company Data (Q1 2020)
Stock Price: $80.10
Total Equity: $261.3B
Preferred Equity: $30.1B
Shares Outstanding: 3,096M
Intangible Assets: $51.9B
Calculations
Book Value = $261.3B - $30.1B = $231.2B
Book Value/Share = $231.2B ÷ 3,096M = $74.68
P/B Ratio = $80.10 ÷ $74.68 = 1.07x
Tangible P/B = 1.38x
P/B Ratio Guide
P/B < 1.0x: Undervalued
Trading below book value
P/B 1.0-2.0x: Fair Value
Reasonable valuation
P/B 2.0-4.0x: Premium
High growth expectations
P/B > 4.0x: Very High
Extreme premium or asset-light
Note: Compare P/B ratios within the same industry. Tech companies often have higher P/B ratios due to intangible assets.
Understanding Price-to-Book Ratio
What is P/B Ratio?
The Price-to-Book (P/B) ratio compares a stock's market price to its book value per share. It shows how much investors are willing to pay for each dollar of net assets.
Why is it Important?
- •Identifies potentially undervalued stocks
- •Compares market value to accounting value
- •Useful for value investing strategies
- •Helps assess financial distress risk
P/B Ratio Formulas
Book Value = Total Equity - Preferred Equity
Book Value per Share = Book Value ÷ Shares Outstanding
P/B Ratio = Stock Price ÷ Book Value per Share
Key Considerations
- •Book value reflects historical costs, not current market value
- •Tangible book value excludes intangible assets
- •Industry comparison is essential for meaningful analysis
- •Asset-heavy industries typically have lower P/B ratios