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Price To Book Ratio Calculator

Work out price to book ratio instantly with clear inputs, formula shown and shareable results.

About Price To Book Ratio Calculator

Price to book compares market value with accounting net worth. A multiple above one means the market expects the company to earn more than its cost of equity — at a 10% cost of equity, a 2.4× multiple implies a sustainable return on equity near 24%.

Formula

Price to book

P/B = price / book value per share; justified P/B ≈ ROE / cost of equity

Worked example

With the default values below, Price To Book Ratio Calculator returns Price To Book Ratio of 2.438. Change any input above and every figure here is recalculated in your browser.

Inputs used

Share Priceminimum 0
780
Book Value Per Shareminimum 0
320

Results

Price To Book Ratio
2.438
Premium Over Book Value
143.75%
Book Value Behind Every 100 Of Price
$41.03
Return On Equity Needed To Justify It At A 10% Cost Of Equity
24.38%

Step by step

  1. 1Values used
  2. 2Price to book
  3. 3Price To Book Ratio= 2.438
  4. 4Premium Over Book Value= 143.75
  5. 5Book Value Behind Every 100 Of Price= 41.03
  6. 6Return On Equity Needed To Justify It At A 10% Cost Of Equity= 24.38

Assumptions and limits

  • The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
  • In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
  • Figures are rounded for display to 3 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
  • Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
  • This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.

Frequently Asked Questions

Why is P/B most used for banks?

Because their assets are largely financial and marked close to fair value, so book value is meaningful.

Why is it weak for asset-light firms?

Intangibles like brands and software are often not on the balance sheet, so book value understates real capital.

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