Work out price to book ratio instantly with clear inputs, formula shown and shareable results.
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%.
Price to book
P/B = price / book value per share; justified P/B ≈ ROE / cost of equity
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.
Because their assets are largely financial and marked close to fair value, so book value is meaningful.
Intangibles like brands and software are often not on the balance sheet, so book value understates real capital.