Price to Book

Price to Book = Current share  price / Book value per share

Book Value = Total common shareholder equity (incl. reserves)

You can read more about using the Price to Book ratio as an investment strategy here: Price to book strategy back test

 

Be careful! – Long periods of under-performance

Although the Price to Book ratio is a good valuation ratio it also has long periods of under-performance, please refer to the following article: Be careful of this time tested value ratio

 

We suggest that you use Book to market

You can use Price to Book in the screener but we suggest you use the Book to Market (inverse of price to book) as it gives you better screening results. This article explains why: Why use book to market and not price to book?

 

Remember

All ratios are calculated on a trailing 12 months (TTM) basis.

This means the last twelve months (not the company’s financial year) is compared to the same period in the past. We do this to make sure that the screener data includes the latest, most up to date, financial results of the company.

 

How to use the ratio

Available as a screening ratio: No (Use the Book to Market ratio in stead)

Available as an output column ratio: Yes (Look for it under the Valuation heading)

 

How to select the lowest Price to Book companies

To find companies with the lowest Price to Book Ratio:

  • Select Book to Market ratio in the screener set the slider from 0% to 10%
  • Select Price to Book as an output column
  • Click on the column heading to sort it from low to high.

 

Click here to start using the Price to Book Ratio in your portfolio NOW!