P/B ratio, or the price-to-book ratio, is the valuation of a company’s stocks in relation to its book value. This implies that the market value of equity is usually bigger than the stock’s book value. Value investors utilize price-to-book ratio in looking for possible investment opportunities.P/B ratio is used by many investors to compare market prices of a company with its book value and to find out underrated organizations. The BP/E ratio equals the stock price per share as defined over the BVPS.  

The formula for the price-to-book ratio is:P/B ratio= market price per share / Book value per share

Market Price Per share=Current Market Price per share.

Book Value per Share = (total asset – intangible asset- total liability)/no. of outstanding shares

• Most stock-tracking websites provide such market value per share. 
• To obtain total assets, total liabilities, and outstanding shares you have to look at the company’s balance sheet.
• The P/B ratio reflects  the value that market participants attach to a company's equity relative to the book value of its equity. 
• The P/B ratio is commonly used by many investors to find out underpriced stocks. Purchasing a mispriced security that will return to what was perceived as its ‘correct’ value will bring rewards to the trader who bought it, in theory.
• The P/ B ratio has been described as a forward looking indicator based on future cash flows by some investors