Valuation
P/B — Price to Book Ratio
Market cap divided by total equity.
Definition
Price-to-book is the simplest balance-sheet valuation multiple. P/B above 1x means the market values the company at more than its accounting net worth.
Formula
Market Cap ÷ Total Equity
Why it matters
P/B is most informative for companies whose value largely sits on the balance sheet (banks, insurers, REITs). For asset-light businesses, P/B is a poor measure because intangibles (brands, customer relationships) are systematically under-counted.
How Standard Equity uses it
Shown in the main table for banks, insurers and broker-dealers, and for investment holding companies, where it replaces FCF yield. The SE Grade's price position compares it with its own 10-year median. For a holding company, below 1x is a discount to book value: a discount to net asset value only for a fair-value investment entity, not for an equity-method holder, whose book value is the carrying value of its stakes.
The metric
| Category | Valuation |
|---|---|
| Unit | x |