Price to book (PB) ratio

Price to book (PB) ratio,

Definition of Price to book (PB) ratio:

1. Used by the security analysts to determine whether the stock is undervalued (therefore its price is expected to rise in the future) or overvalued (it is a popular growth stock). Also called market to book ratio, it is applied to firms that have lots of fixed assets. Formula: Market value of outstanding stock ÷ Book value of assets.

2. A book containing a list of prices charged in a particular trade; usually with modifying word.