# 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         |

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