price to book (PB) ratio definition

price to book (PB) ratio

Used by the security analysts to determine whether the stock is undervalued (therefore its price is expected to rise in the future) or overvalued (it is a popular growth stock). Also called market to book ratio, it is applied to firms that have lots of fixed assets. Formula: Market value of outstanding stock ÷ Book value of assets.

price to book (PB) ratio is in the Accounting & Auditing, Banking, Commerce & Finance, Investing and Securities & Futures Trading subjects.

price to book (PB) ratio appears in the definitions of the following terms: growth investing, market to book ratio and price/book (P/B) ratio

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