What Is P / BV?

Patrick Curtis

Reviewed by

Patrick Curtis WSO Editorial Board

Expertise: Investment Banking | Private Equity

Price to Book Value (P / BV) is a financial ratio used to assess the relative price of a stock compared to the book value per share. Essentially, it tells you how much you have to pay in order to get access to 1 share worth of book value. P / BV is used as a measure of whether a stock is intrinsically over or undervalued, because it reflects the value of the company were it to be liquidated (i.e. book value).

P / BV is used when comparing publicly traded companies to see at what multiple of book value it is acceptable to be trading at. As such, it is extremely useful in fundamental analysis and intrinsic valuation in comparable analysis but, as with most multiples, should be used only between similarly sized companies in the same industry.

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Patrick Curtis

Patrick Curtis is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. He has experience in investment banking at Rothschild and private equity at Tailwind Capital along with an MBA from the Wharton School of Business. He is also the founder and current CEO of Wall Street Oasis. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.