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Finance Dictionary

P/B Ratio

Price-to-Book Ratio — compares a company's market price to its book value (net assets). P/B < 1 may indicate undervaluation. Popular in banking sector analysis.

Formula

P/B = Market Price per Share / Book Value per Share

Example

A bank trading at ₹100 with book value of ₹80/share has P/B of 1.25x.