P/VPA (P/B)
- Created by
- Renato Passos, Eng. de Software
- Reviewed by
- Renato Passos, Eng. de Software
Last updated: Apr 18, 2026
About this calculator
The P/B (Price to Book) calculator helps evaluate the relationship between a stock's market price and its book value per share. This ratio is useful for investors comparing stock valuations against a company's actual assets, indicating whether shares are overpriced or undervalued.
The formula is calculated as (Stock Price) divided by (Book Value per Share). Book Value is determined by dividing Net Equity by the number of shares. A ratio below 1 may suggest the stock is trading below its asset value, while values above 1 indicate the market pays more than what's recorded on the company's balance sheet.
This metric is particularly relevant for firms with tangible assets like banks or real estate companies. However, in industries reliant on intangible assets (e.g., technology), P/B may be less informative. Always use it alongside other indicators like EBITDA and net debt to make well-rounded decisions.
Note that P/B does not reflect a company's future potential, only the price-to-book relationship. A low P/B could also signal structural issues in distressed companies, not just investment opportunities. Always analyze sector context and fundamental health before investing based solely on this metric.
Frequently asked questions
What is the P/B (Price to Book) ratio?
It measures the relationship between a stock's market price and its book value per share, showing if a company is bought above or below its accounting value.
How does the P/B calculator work?
It divides the stock price by the book value derived from the company's financial statements. Requires current stock price and net equity figures.
When should I use the P/B metric?
Use it to compare companies in the same sector with tangible assets. It's best for identifying stocks trading at a discount to their book value during market accidents.
Is a low P/B always a good sign?
No. It could indicate opportunity or company distress. Check if the low value stems from undervalued assets or poor business performance.
What specific data do I need for this calculator?
You need the current stock price and the company's net equity, typically found in quarterly financial reports.