The price-to-book (P/B) ratio compares market price to book value per share (assets minus liabilities). A P/B of 2 means investors pay twice the accounting net worth.
It works best where book value is meaningful - banks, insurers, utilities. It misleads for asset-light software or brand businesses whose real value never sits on the balance sheet.
Example
A bank trading at 1.2x book with 1%+ ROA is usually cheaper than a rival at 0.8x book hiding bad loans - asset quality adjusts every P/B reading.
In Ticker Screener
P/B auto-derives for Indian stocks so the column never shows blank, and formats Screener-style (2.4, not 2.40).
Frequently asked questions
Is P/B under 1 always cheap?
Often it prices distress - bad loans, stranded assets or structural decline. Cheap on book still needs clean assets underneath.
Related terms
ROE
Return on equity: profit earned per rupee of shareholder money. High and stable ROE compounds wealth.
P/E Ratio
Price-to-earnings: what you pay for each rupee or dollar of yearly profit. The starting lens for cheap vs expensive.
Market Cap
Price times shares outstanding: the market's price tag for the whole company. Defines large, mid and small caps.
P/E, ROCE, ROE, P/B, dividend yield and market cap — live beside every price in your watchlist.