™$20 share price divided by $5 book value per share gives P/B 4. Accounting asset values and intangible-heavy businesses limit interpretation.
Fundamentals
Price-to-book ratio
Market price per share divided by book value per share.
Plain-English context
Put the definition to work.
Negative equity, accounting differences and unrecorded intangible value can make a simple P/B comparison misleading.
Further reading and verification. Examples are hypothetical, not current quotes or recommendations. Product terms, tax treatment and market rules can change. SEC — financial statement guide