## Price to Book value Ratio

Price to book ratio (PBV ratio or P/B ratio) expresses the relationship between the stock price and the book value of each share.

This ratio used to compare a company’s book value to its current market price. This ratio also gives some idea of whether an investor is paying too much for what would be left if the company went bankrupt immediately.

The lower the PBV ratio, the better the value is. However, the value of the ratio varies across industries. A better benchmark is to compare with industry average.

## How to calculate Price to Book value Ratio?

It is calculated as follows:

**NEXT – Market Test Ratios: Price/Sales Ratio**

**Table of Contents**

**1) Market Test Ratios: Introduction
2) Market Test Ratios: Earning per Share Ratio
3) Market Test Ratios: P/E Ratio
4) Market Test Ratios: Payout Ratio
5) Market Test Ratios: Dividend Yield Ratio
6) Market Test Ratios: Price/Cash flow Ratio
7) Market Test Ratios: Price to book value Ratio
8) Market Test Ratios: Price/Sales Ratio
9) Market Test Ratios: Price/Earnings To Growth Ratio**