What is Price to Tangible Book Value ratio?

Price to Tangible Book Value ratio is a valuation ratio expressing the price of a stock compared to its tangible book value as reported in the company's balance sheet. The tangible book value is the company's total book value minus the value of any intangible assets (patents, intellectual property, goodwill, ...). The ratio is calculated by dividing the share price by the tangible book value per share. Greater PTBV means greater potential risk, since the tangible book value is the lowest price (in theory) at which the share can be traded.