The formula for price to book value is the stock price per share divided by the book value per share. Formula and Calculation of PB Ratio In this equation book value per share is calculated as follows. The formula for the price to tangible book value is.
For example if the BVPS is 20 per share and the market value of the same common share is 30 per share the investor can find out the ratio of price to book value as Price Book Value 30 20 15.
Price to Tangible Book Value Share Price Tangible Book Value per Share For example lets assume that Company XYZ has 10000000 shares outstanding which are trading at 3 per share. The company also recorded 15000000 of tangible book value last year. The formula for calculating book value per share is the total common stockholders equity less the preferred stock divided by the number of common shares of the company. It is possible to get the price per book value by dividing the market price of a companys shares by its book.