The most recent stock price divided by the most recent book value per share.
Benefit
By comparing the five-year average price/book ratio with the current price/book ratio, you can quickly see if the company is currently valued higher or lower than it has been historically.
Origin
The company’s most recent price is received from CComStock, a division of Interactive Data Corporation.
For the Pros
Use the following formula to look for companies that trade at a discount to their historical valuations. The same equation can be used with Price/Earnings, Price/Sales and Price/Cash Flow:
PB Current / PB 5-Year Average