P/B: drag book value
Drag the bar to set book value per share. The share price stays put, so P/B moves only because book does. Raise BVPS and the multiple falls. Cut book instead and the same price prints a higher P/B with no change in the market residual.
P/B
2.50x
Book value per share
$20.00
Raise book value per share and the multiple falls. Market cap stays put until the price moves. Book equity $2,000,000,000. Illustrative arithmetic, not a valuation or advice.
Share price
$50.00, held still so only the denominator moves.
In short
- Drag the bar up for a higher P/B, which is a thinner book value per share.
- Read the multiple as times book, not as a percent.
- Watch the price stay put. Only the denominator is moving.
- Focus the handle and use the arrow keys to step book value.
Market residual over accounting residual
P/B is price over book value per share. How price to book works is that identity, with the P/B calculator under the answer.
Book value per share is the denominator. P/E against P/B is the pair.
At book the bar prints 1
When BVPS equals the price, P/B is 1. That is the accounting residual matching the market residual on this sheet, not a floor under the price.
What the drag will not do
It will not mark assets to market, and it will not strip intangibles. It is educational material, not financial advice.
Common questions
Why does dragging up raise P/B?
Because the bar is the multiple. Higher P/B is lower book on a fixed price. Arrow up steps BVPS down so the bar and the keys agree.
Is 2.50 times book expensive?
It is price over BVPS on the teaching sheet. It is educational material, not a screen.
Book equity or tangible book?
Book equity. Tangible book is a different denominator.
Keep reading
This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.