The Price to Book ratio, also known at the P/B ratio or just PB ratio, is a way to value a stock by looking at its book value. The book value of a stock is essential the "net worth" of the balance sheet.

What the means is to determine the book value you need to take all of the tangible (physical) assets of company and subtract all of its debt/liabilities. You then take the price per share and divide it by the book value per share to get its PB ratio.

In this video we will explain this process of determining the PB ratio of a stock in detail, explain what a good P/B ratio is and how to actually use them in a real life situation.


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Disclaimer: As always these are just our opinions and this video and its comments are for entertainment purposes only and they do not constitute any type of legal, tax or financial advice. Always consult a qualified financial planner, investment adviser, CPA and/or attorney before making any monetary, investment or legal decisions. I take no responsibility neither expressed nor implied for any action that you take with my opinions as expressed in this video.

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