Stock price divided by book value per share.
Book value = total assets minus liabilities. P/B is most useful for asset-heavy businesses (banks, insurers, REITs, industrials) where book value approximates liquidation value. Less meaningful for asset-light businesses (software, brands) where intangibles drive value but aren't fully captured on the balance sheet.
Stock price divided by book value per share. Book value = total assets minus liabilities. P/B is most useful for asset-heavy businesses (banks, insurers, REITs, industrials) where book value approximates liquidation value. Less meaningful for asset-light businesses (software, brands) where intangibles drive value but aren't fully captured on the balance sheet.
In valuation, Price-to-Book (P/B) is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.
Book value = total assets minus liabilities. P/B is most useful for asset-heavy businesses (banks, insurers, REITs, industrials) where book value approximates liquidation value.
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