Price-to-Book Calculator
Calculate book value per share and the price-to-book ratio from common equity, shares outstanding and share price.
Enter your values
Understand this calculation
Price-to-book compares a company's equity market price with accounting book value. It is often more informative for asset-heavy businesses than for firms whose value depends heavily on intangible assets.
Formula
Worked example
$2.0B of common equity and 100M shares produce $20 book value per share. At a $50 share price, P/B is 2.5×.
How to interpret the result
P/B indicates how many times accounting book value investors are paying for each share. Comparability depends on asset quality, return on equity and industry structure.
Assumptions & limitations
Negative common equity makes a conventional P/B ratio not meaningful. Accounting book value may differ substantially from economic value.
Practical context
When this calculator is useful
Price-to-book is useful when book equity is economically meaningful, particularly for banks, insurers and other asset-intensive businesses. It compares the market price of equity with its accounting net asset base.
How investors commonly use it
Investors often compare P/B with return on equity because a high-quality business that earns strong returns on book capital may rationally trade at a higher multiple.
What this metric does not tell you
Book value can be a weak representation of economic value for companies built around software, brands, intellectual property or internally developed intangible assets. Negative equity also makes conventional P/B interpretation unusable.