P/B Ratio

[bwzheng2010]

📊 Price-to-Book (P/B) Ratio

1. What is the P/B Ratio?

The Price-to-Book (P/B) Ratio compares a company’s market capitalization to its book value of equity (BVE):

$$P/B = \frac{Market\ Capitalization}{Book\ Value\ of\ Equity}$$

• Book Value of Equity (BVE): Represents the net asset value of a company (assets minus liabilities) as recorded on its balance sheet.

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2. How to Get P/B Ratio Using defeatbeta-api

import defeatbeta_api
from defeatbeta_api.data.ticker import Ticker

# Example: Navida (NVDA)
ticker = Ticker("NVDA")
pb_df = ticker.pb_ratio()

print(pb_df.head())

Example Output

report_date	market_capitalization	fiscal_quarter	book_value_of_equity	exchange_rate	book_value_of_equity_usd	pb_ratio
2022-05-02	4.890312e+11	2022-04-30	2.632000e+10	1.0	2.632000e+10	18.58
2022-05-03	4.907840e+11	2022-04-30	2.632000e+10	1.0	2.632000e+10	18.65
2022-05-04	5.090632e+11	2022-04-30	2.632000e+10	1.0	2.632000e+10	19.34
2022-05-05	4.717536e+11	2022-04-30	2.632000e+10	1.0	2.632000e+10	17.92
2022-05-06	4.674968e+11	2022-04-30	2.632000e+10	1.0	2.632000e+10	17.76
...	...	...	...	...	...	...
2025-08-22	4.340741e+12	2025-07-31	1.001310e+11	1.0	1.001310e+11	43.35
2025-08-25	4.385127e+12	2025-07-31	1.001310e+11	1.0	1.001310e+11	43.79
2025-08-26	4.432926e+12	2025-07-31	1.001310e+11	1.0	1.001310e+11	44.27
2025-08-27	4.428780e+12	2025-07-31	1.001310e+11	1.0	1.001310e+11	44.23
2025-08-28	4.393906e+12	2025-07-31	1.001310e+11	1.0	1.001310e+11	43.88
2025-08-29	4.247825e+12	2025-07-31	1.001310e+11	1.0	1.001310e+11	42.42

🔎 Columns explained:

• report_date → date of the market capitalization record
• market_capitalization → company’s valuation at that date
• fiscal_quarter → quarter-end date for book value of equity
• book_value_of_equity → stockholders’ equity reported in local currency
• exchange_rate → FX rate used to convert local equity into USD
• book_value_of_equity_usd → equity converted to USD
• pb_ratio → computed P/B ratio

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3. How defeatbeta-api Implements the P/B Ratio

The method Ticker.pb_ratio() calculates the P/B ratio by combining market capitalization data with quarterly book value of equity:

1. Market Capitalization

   • Retrieved from market_capitalization()
   • Represents the market’s valuation of the company at a given date

2. Book Value of Equity (in USD)

   • Retrieved from _quarterly_book_value_of_equity()
   • Uses item_name = 'stockholders_equity' from quarterly financial statements
   • Converted into USD using the exchange rate at each quarter (exchange_to_usd_rate)

3. Data Alignment

   • Uses pandas.merge_asof (with direction="backward")
   • Each market cap record is matched with the most recent available book value of equity

4. Final Formula

   • For each aligned record:

$$P/B = \frac{Market\ Cap}{Book\ Value\ of\ Equity\ (USD)}$$

• Rounded to two decimals