Price-to-Book Ratio

A stock price relative to its book value per share.

The price-to-book ratio compares a company market value to its accounting net worth. A P/B below 1 may signal undervaluation or trouble, while high P/B is common for asset-light firms. It is most useful for capital-intensive businesses like banks and insurers.

Trading at a price-to-book ratio below 1, the bank looked cheap relative to its net worth.