Price-to-Book Ratio (P/B)

The price-to-book ratio compares a company's stock price to its book value per share (total assets minus total liabilities, divided by shares outstanding). A P/B ratio below 1.0 may indicate the stock is undervalued relative to its assets, while a high P/B may suggest overvaluation or that the market expects strong future growth. It is most useful for valuing financial and asset-heavy companies.

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