P/B ratio (KBV)
A ratio that compares a company's stock market value with the equity on its balance sheet.
In short
As of 8 October 2026The P/B ratio (price-to-book, German KBV) divides the share price by book value per share, meaning balance-sheet equity per share. A P/B below 1 means the market values the company below its equity. That may look cheap but often has a reason. The ratio is most useful for banks, insurers and industrial companies.
The price-to-book ratio (German: KBV) divides the share price by book value per share. Book value is roughly the equity on the balance sheet: assets minus debts. How solid that cushion is shows up in the equity ratio.
A P/B below 1 means the market values the company below its equity. That can be a bargain, but there is often a reason, such as weak profits. Banks and insurers are often compared by P/B; software firms hardly ever, because their value barely shows on the balance sheet. Investors looking for value stocks like this ratio.
Example: a share costs 30 euros and book value per share is 40 euros. The P/B ratio is 0.75. How to read such figures is covered in how prices are made.
Related terms
As of 8 October 2026 · Educational content, not investment or tax advice.