Price-to-Book Calculator
Price vs. balance-sheet equity.
Also available in German: KBV-Rechner (Kurs-Buchwert) →
Inputs
Share price
Also called: Stock price, market price
Where to find it: Any finance site (Google/Yahoo Finance) — the current trading price per share.
How to derive: Set by the market; just enter the current price per share.
Book value per share
Also called: BVPS, equity per share
Where to find it: Balance sheet: shareholder equity ÷ shares. Often listed directly as a stat.
How to derive: Shareholder equity ÷ shares outstanding.
Result, live
Crucial for banks/insurers; weak for tech (intangibles missing from the balance sheet).
The price-to-book ratio (P/B) compares the share price to the equity on the balance sheet — the net assets that would theoretically remain if the company were wound down. This calculator divides share price by book value per share and shows instantly whether you pay a premium or a discount to that substance.
How the formula works
Book value per share is total equity divided by the number of shares. The P/B ratio sets the market price against that accounting value: a ratio of 1 means you pay exactly the net assets, above 1 a premium, below 1 a discount.
P/B = share price ÷ book value per share
Example: A stock trades at $50 with a book value of $32 per share. P/B = 50 ÷ 32 = 1.56. You pay about 56% more than the accounting net assets — a normal premium for a profitable firm.
How to read the result
- Below 1 — priced under book value; a possible bargain, but find out why the market is skeptical.
- 1 to 3 — the normal range for most healthy companies.
- Above 3 — a clear premium to net assets; justified only by strong returns on equity.
What to watch out for
- Weak for tech. Brands, software and patents barely appear on the balance sheet, so asset-light firms look expensive on P/B.
- Book value can be stale. Assets are carried at historical cost, not today's worth.
- Cheap can mean broken. A P/B below 1 sometimes signals losses ahead, not a bargain.