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P/B (Price-to-Book) ratio

P/B divides a company’s market capitalisation by the book value of its equity and shows the premium the market assigns to its net assets. The price-to-book ratio measures how much more or less investors pay for a company than the net assets recorded in its accounts.
Contents
  1. 1.Key points
  2. 2.Formula / calculation
  3. 3.Live example
  4. 4.Interpretation
  5. 5.Pitfalls
  6. 6.Low P/B Stocks
  7. 7.Frequently asked questions

Key points

  • It is as important as P/E for banks, holdings and asset-heavy industrial companies.
  • A P/B below 1 means the share trades under its book value, implying the market doubts the value of the assets or their profitability.
  • book value is carried at historical cost, so real estate and subsidiaries may be understated; inflation-accounting transitions can jump equity.

Formula / calculation

P/B = Market capitalisation / Shareholders’ equity, or Share price / Book value per share. Equity is total assets minus total liabilities on the balance sheet and is refreshed every quarter with the KAP financial report.

Live example

P/B ratio
0.39
THYAO
Last price
290.75 TL
Daily change
0.00%
Market cap
TRY 401.2B

Interpretation

A P/B below 1 means the share trades under its book value, implying the market doubts the value of the assets or their profitability. A high P/B may reflect a high return on equity or intangible assets such as brands and patents that do not appear on the balance sheet.

Pitfalls

book value is carried at historical cost, so real estate and subsidiaries may be understated; inflation-accounting transitions can jump equity. Technology and service companies own few tangible assets, which makes P/B meaninglessly high. Read it alongside return on equity.

Low P/B Stocks

Open in screener
StockP/BDaily
1.MENDERES TEKSTILMNDRSMenderes Tekstil0.150.00%
2.MEGA POLIETILENMEGAPMega Polietilen0.160.00%
3.ZORLU ENERJIZORENZorlu Enerji0.160.00%
4.YESIL YAPIYYAPIYesil Yapi0.170.00%
5.IHLAS GAZETECILIKIHGZTIhlas Gazetecilik0.180.00%
6.MARTI GMYOMRGYOMarti GMYO0.180.00%
7.SINPAS GMYOSNGYOSinpas GMYO0.180.00%
8.VESTEL BEYAZ ESYAVESBEVestel Beyaz Esya0.180.00%
9.GULER YAT. HOLDINGGLRYHGuler Yat. Holding0.190.00%
10.KILER GMYOKLGYOKiler GMYO0.190.00%

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Related terms

Frequently asked questions

P/B divides a company’s market capitalisation by the book value of its equity and shows the premium the market assigns to its net assets.

P/B = Market capitalisation / Shareholders’ equity, or Share price / Book value per share. Equity is total assets minus total liabilities on the balance sheet and is refreshed every quarter with the KAP financial report.

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