The Price-to-Book (P/B) Ratio measures the market capitalization of a firm against their book value. This valuation metric aids in stock analysis by determining whether the asset is undervalued or overvalued. A Price-to-Book (P/B) Ratio of 1 indicates that the stock price is trading in line with the book value of the firm. Price-to-Book (P/B) Ratio = Market Capitalization / Book Value of Equity