What it measures
Price to book (P/B) compares what the market pays for a share with the net assets behind it on the balance sheet.
In one line: P/B = market price per share / book value per share, where book value per share is shareholders' equity divided by shares outstanding. The result is a multiple, written like 2.6x.
How to read it
Below 1x, the market values the company at less than its accounting net worth. Above 1x, the market expects the assets to earn more than they cost. It is most used for banks, whose balance sheet is the business. In the latest bank posts, the Indonesian banks sit between about 1.27x (Mandiri) and 2.6x (BCA).
Where it misleads
Book value is an accounting number. Loans carried at full value that will not be repaid, or assets bought at an inflated price, raise book value without raising worth. The ratio also says nothing on its own about returns: a high P/B is reasonable for a bank earning a high return on equity and expensive for one that is not. Read it next to ROE. Share counts matter too: net of treasury shares or issued shares give different book value per share.
Worked example
In BCA's Q3 2026 post, equity attributable to owners was Rp283,419,338 million and shares outstanding were 122,841,751,300, net of treasury shares.
- Book value per share: 283,419,338 million / 122,841,751,300 = about Rp2,307, as the post states.
- Share price at 30 September 2026: Rp6,075.
- P/B: 6,075 / 2,307 = 2.63x, which the post shows as about 2.6x.
The post notes this is almost the same as ICICI Bank's multiple (about 2.63x) and roughly twice BRI's (about 1.29x) and Mandiri's (about 1.26x), whose figures are from Q2 2026.
Where to find it
Market data for the price, balance sheet for equity.
See also: Book Value, P/E Ratio, ROE.