Dados B3 › Glossary

Glossary

P/B (price to book value)

How much the market pays for the company's book equity: 1 means market value equals equity.

What it is

How much the market pays for the company's book equity: 1 means market value equals equity. Shown on the stocks pages.

How Dados B3 calculates it

market value ÷ equity attributable to controlling shareholders (total equity minus the minority stake in subsidiaries). Not published when equity is zero or negative. The 12-month P/B uses the latest quarterly balance sheet.

Example

Illustrative example, with made-up numbers to keep the arithmetic easy: Equity of R$ 500 million and market value of R$ 1 billion: P/B = 1,000 ÷ 500 = 2. The market pays twice what is on the balance sheet.

What to watch for when reading it

• Book equity is historical cost, not sale value: old assets, brands and technology are understated or absent.
• A company that buys back many shares can have small equity and a high P/B without anything being wrong.
• Banks and capital-heavy industries are where P/B helps most; in services and technology it helps little.

See also

• BVPS (book value per share)
• P/E (price to earnings)
• ROE (return on equity)

Methodology · Guide · All indicators

Educational content to understand what each number means. It is not a recommendation to buy or sell.