Glossary
Price-to-book ratio: meaning, example and why it matters
The share price divided by the book value per share, which is the company's assets minus its liabilities divided by its number of shares. It is used most for banks and asset-heavy companies.
Worked example
A share priced at ₹150 with a book value of ₹50 per share has a P/B of 150 ÷ 50 = 3.
Illustrative numbers for explanation only. They are not market data, a forecast or a suggestion.
Why it matters
P/B compares price with the accounting value of the company's assets after liabilities, and is used most for banks and asset-heavy companies.
Related terms
See it in practice
Frequently asked questions
Is a P/B below 1 a sign of a bargain?
Not by itself. It can reflect doubts about asset quality or low profitability.
Is this page investment advice?
No. Price-to-book ratio is explained in general terms with illustrative numbers. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser.
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Educational content, not investment advice. Market Dekho is not a SEBI-registered Research Analyst or Investment Adviser. Spotted a mistake? Email marketdekho01@gmail.com.