The latest closing price of the stock divided by the most recent quarter's book value per share. (Book value is simply assets minus liabilities.) Also known as the price/equity ratio. A favorite of strict value investors, the price/book ratio gives some idea of whether you're paying a little or a lot for what would be left of the company if it went out of business immediately. A price/book ratio of less than one causes value hunters to salivate.
As with most ratios, this one will vary by industry. The price/book ratio can be especially useful in any field where asset values are fairly certain. The thrift industry is one example; since a thrift's largely financial assets are much easier to value than those of an industrial concern, the price/book ratio for a thrift is not as subject to accounting vagaries.
The Price/Book Ratio for an entire portfolio is the weighted average of the price/book ratios of all the stocks in a mutual fund's portfolio.