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