Price-to-Book (P/B)

Price-to-Book (P/B) is a ratio that compares a company's stock price to its book value—basically what the company's assets would be worth if you subtracted all its debts. You calculate it by dividing the stock price by the book value per share. You'll see P/B used when evaluating whether a stock is cheap or expensive, especially for asset-heavy businesses like banks or manufacturers. A lower P/B might suggest the stock is undervalued, while a higher one could mean investors are paying a premium. For example, if TechCorp trades at $50 per share with a book value of $25 per share, its P/B would be 2.0—meaning you're paying $2 for every $1 of assets. It's one tool among many for deciding if a stock is worth buying.