The Price-to-Book (P/B) ratio compares a company's market price per share with its book value per share to assess its market valuation. It is calculated by dividing the current share price by the book value per share. Investors commonly use the P/B ratio while evaluating companies in asset-intensive sectors, as it helps identify whether a company appears undervalued or overvalued relative to its net assets. However, it should be analysed alongside other financial ratios rather than in isolation.
