Price to Book Ratio Explained (P/B Ratio) | Valuation Ratios

The price to book ratio (PB Ratio) or price to book multiple is one of the many valuation ratios used by investors to determine whether a stock is cheap or expensive. It’s based on comparing the company’s share price to the company’s net assets.

P/B ratio = share price / book value per share

Where the book value per share is calculated as (Total Assets - Total Liabilities) / Shares outstanding.

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