Price to Book Ratio PB Definition & Meaning | Fundamental Analysis | CSIMarket
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Glossary

Price to Book Ratio PB

Fundamental Analysis

The Price to Book Ratio (PB), also known as the Price to Equity Ratio, is a financial ratio that compares a company*s price per share to its book value per share. The book value per share is calculated by subtracting a company*s liabilities from its assets and dividing by the total number of outstanding shares.

PB is another tool commonly used in fundamental analysis to evaluate a company*s financial health and determine if a stock is overvalued or undervalued. A low PB can indicate that a stock is undervalued and may be a good buy, while a high PB may mean that the stock is overvalued and may be a sign to sell.

The formula for calculating PB is:

PB = Market Price per Share / Book Value per Share




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