Price to Book Calculator

Price to Book Calculator: calculate price to book for your business. Formula, benchmarks, and practical tips included.

The price-to-book (P/B) ratio compares a company's market capitalisation to its net book value (shareholders' equity on the balance sheet). A P/B of 1.0 means the market values the company at exactly its book value; above 1.0 means the market assigns value to earnings power, brand, and intangible assets beyond what the balance sheet records; below 1.0 may indicate a distressed or value company where tangible assets exceed market value. P/B is most useful for asset-heavy businesses (banks, property, industrials) and is less meaningful for asset-light software or service businesses. Profit Margin Calculator and Markup Calculator provide complementary valuation perspectives.

Enter current market capitalisation (share price × shares outstanding).
Enter book value of equity from the balance sheet (total assets − total liabilities).
P/B = Market cap ÷ Book value of equity.
Alternatively: P/B = Share price ÷ Book value per share.
For banks, tangible book value (excluding goodwill and intangibles) is the standard comparison — use price-to-tangible book (P/TBV).

Price-to-book formula

P/B = Market capitalisation ÷ Book value of equity

P/B = Share price ÷ (Book value ÷ Shares outstanding)

Worked example: Market cap 4,500. Book equity 1,800. P/B = 4,500/1,800 = 2.5×. The market values the company at 2.5× its net assets — implying the market assigns significant value to intangibles, brand, and future earnings power beyond balance sheet assets.

P/B benchmarks by sector

Typical P/B ranges

P/B ranges by sector (2024): banks and financial services 0.8–1.5× (tangible book value); utilities 1.5–2.5×; industrials 2–4×; consumer staples 4–8×; technology 5–20×; SaaS/high-growth software 8–30×+. A P/B below 1.0 is significant for banks — it suggests the market believes book equity is overstated or that future returns will be below cost of equity. A P/B above 10× implies the vast majority of value is in intangible assets and future earnings not recorded on the balance sheet.

Business tips and best practices

P/B is most meaningful for banks and asset-heavy businesses — for software or services businesses where the main assets are people and IP, book value is largely irrelevant to valuation.
Return on equity (ROE) and P/B are systematically related — companies with high sustainable ROE trade at high P/B; the fair P/B = ROE ÷ cost of equity.
Write-downs of goodwill and intangibles reduce book value without affecting market value — compare P/B before and after write-downs for consistency.

See formula and results sections for key figures and benchmarks.

Common mistakes to avoid

See tips section for common pitfalls to avoid.

Book value is an accounting figure that varies by accounting standard (IFRS vs US GAAP vs local GAAP) and by management judgment in areas such as impairment, fair value measurement, and pension liability treatment. P/B comparisons across companies using different accounting standards require careful adjustment. For regulated financial institutions, regulatory capital ratios are related to but distinct from book value. This calculator is for educational purposes only.