P/B compares the market price with the accounting value of the company’s net assets. It is widely used for banks and insurers. A P/B below 1 can signal a bargain, or a business the market expects to lose value.
How to use the Price to Book Ratio Calculator
- Total stockholder equity
- Preferred equity
- Goodwill and intangible assets
- Shares outstanding
- Share price
Results update as you type, and every field accepts the units shown in its menu.
How it works
Enter total stockholders’ equity, preferred equity, intangible assets, shares outstanding and the share price.
Inputs explained
| Field | What to enter |
|---|---|
| Total stockholder equity | Amount in your currency |
| Preferred equity | Amount in your currency |
| Goodwill and intangible assets | Amount in your currency |
| Shares outstanding | A number |
| Share price | Amount in your currency |
What each result means
- Book value per share = ([Total stockholder equity] – [Preferred equity])÷[Shares outstanding]
- Price to book ratio = [Share price]÷[Book value per share]
- Tangible book value per share = ([Total stockholder equity] – [Preferred equity] – [Goodwill and intangible assets])÷[Shares outstanding]
- Price to tangible book ratio = [Share price]÷[Tangible book value per share]
Example values
How the main result changes when Total stockholder equity changes and everything else stays at the example values above:
| Total stockholder equity | Price to book ratio |
|---|---|
| 400,000,000 | 3.86 |
| 600,000,000 | 2.45 |
| 800,000,000 | 1.8 |
| 1,000,000,000 | 1.42 |
| 1,200,000,000 | 1.17 |
| 1,600,000,000 | 0.87 |
Formula
Book value per share = (total stockholders' equity − preferred equity) ÷ shares outstanding
P/B = share price ÷ book value per share
Tangible BVPS = (common equity − intangibles) ÷ shares
Worked example
Inputs: Total stockholder equity: $800,000,000; Preferred equity: $50,000,000; Goodwill and intangible assets: $200,000,000; Shares outstanding: 50,000,000; Share price: $27.
Results: Book value per share = $15.00; Price to book ratio = 1.8; Tangible book value per share = $11.00; Price to tangible book ratio = 2.45.
Frequently asked questions
What is a good P/B ratio?
Below 3 is often considered reasonable; below 1 may signal undervaluation.
Why exclude preferred equity?
Book value per share should reflect common shareholders only.
Which industries use P/B most?
Banks, insurers and other asset-heavy businesses.