The price to book reflects the value that market participants attach to a company's equity relative to the book value of its equity. A stock's market value is a forward-looking metric that reflects a company's future cash flows. The book value of equity is an accounting measure based on the historic cost principle and reflects past issuances of equity, augmented by any profits or losses, and reduced by dividends and share buybacks.

The price to book value is the share Price divided by the book value per share. The BVPS is calculated as follows: (Common Equity less Intangibles divided by the Fully Diluted Shares Outstanding at the end of the period. Market value per share is obtained by simply looking at the share price quote in the market.

A lower P/B ratio could mean the stock is undervalued. However, it could also mean something is fundamentally wrong with the company. As with most ratios, this varies by industry. Another way to look at P/B ratio is the premium that would remain if the company went bankrupt immediately (for example, a 1.6 book value implies a 60% premium).

Formula

Price / BVPS

 

Availability

These ratios combine data from from line item filings and factors that use prices (click here for the line-item reference). Which price is used in the calculation depends on the period. The latest close price is used for ratios that involve the latest financials, like the most recent quarter or the latest trailing twelve fiscal months (TTM). For ratios that involve older financials, like the quarter one year ago, or the TTM one year ago, the price used for the calculation is the average price during the following quarter.

Quarterly values from Income & Cashflow statements are annualized to make the resulting factor more readily comparable with 12-month factors. The annualization is done by multiplying the quarterly figures by approximately 4 (depends on the actual number of days in the period).

You can either use a prebuilt ratio or use the function to define your own.

Function

RatioName(offset,type)
offset: 0-25 (for interim) 0-10 (for annual)
type: QTR (for interim), ANN (for annual), TTM (for trailing twelve months)

For example to screen for stocks whose P/E today is less than their P/E from their previous fiscal 4 quarters enter:

PEExclXor(0,TTM) < PEExclXor(4,TTM)

The above can also be done using prebuilt ratios:

PEExclXorTTM < PEExclXorPTM

Prebuilt Ratios

Prebuilt ratios are available for these periods:

Period	Description	Price	Line Item
Q	Recent Quarter	Close(0)	(0, QTR)
PQ	Prior Quarter	Avg nextQ	(1, QTR)
PYQ	Prior Year Quarter	Avg nextQ	(4, QTR)
TTM	Trailing Twelve Months	Close(0)	(0, TTM)
PTM	Prior TTM	Avg nextQ	(4, TTM) **
A	Recent Annual	Avg nextQ	(0, ANN)
PY	Prior Year	Avg nextQ	(1, ANN)

** PTM offset is 4 , not 1, since it uses interim periods