In the realm of financial analysis, the price-to-book ratio (P/B ratio) stands as a fundamental tool that offers investors valuable insights into a company’s financial health and market valuation. By examining the relationship between a company’s market price and its book value, investors can make informed decisions about potential investments. In this article, we delve into the concept of the price-to-book ratio, how it is calculated, and its significance in the world of investing. The price-to-book ratio is a simple yet powerful metric used to assess whether a company’s stock is overvalued or undervalued relative to its accounting value. It compares the market price of a share to the company’s book value per share, thereby providing a glimpse into the market’s perception of the company’s financial worth. The P/B ratio is particularly relevant for industries with significant tangible assets, such as manufacturing, real estate, and banking. The formula to calculate the price-to-book ratio is straightforward: Where: Market Price per Share is the current market price of a single share of the company’s stock. Book Value per Share is the company’s total assets minus its total