P/B (price-to-book ratio)

The P/B (price-to-book ratio) is a financial metric that compares a company's market price per share with its book value per share. This ratio is calculated by dividing the market price of a single share by the book value of one share (the company's equity divided by the number of outstanding shares). The P/B ratio is used to assess whether a stock is undervalued or overvalued relative to the company's book value. A lower P/B may indicate that the stock is undervalued or that the company is facing issues, while a higher P/B could suggest overvaluation or expectations of higher growth.