P/B
Definition · Level 9 · Valuation
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Price ÷ book value (shareholders’ equity) per share. The go-to multiple for banks and insurers; below 1 means the stock trades under accounting equity.
Example
Bank at $45 with $50 book per share → 0.9x.
Where Tradecraft teaches it
Level 9 · Valuation, in the lesson “Multiples: equity value vs enterprise value”: P/E, PEG, P/S, P/B, EV/EBITDA, yields — and matching numerator to denominator.
Related terms
- Enterprise valueWhat the whole operating business is worth to all capital providers: market cap + debt + preferred + minority interest − cash.
- EV/EBITDAEnterprise value ÷ operating earnings before D&A.
- FCF yieldFree cash flow ÷ market cap — the cash return the business generates on the equity price; the inverse of price-to-free-cash-flow.
- Minority interestThe stake outside shareholders hold in subsidiaries a parent consolidates but doesn’t fully own; also called non-controlling interest.
- P/E ratioShare price ÷ earnings per share: how many dollars the market pays for $1 of annual profit.
- P/S ratioMarket cap ÷ annual revenue (equivalently price ÷ sales per share): what the market pays per dollar of sales.