New Delhi, March 6 -- There are several measures to understand whether a stock aligns with your investment or financial goals. One such metric is the price-to-book ratio or P/B ratio, which helps determine whether a stock is overvalued or undervalued.

The price-to-book value ratio, also known as the price-equity ratio, shows the relationship between the market value of a company per share and its book value, which is the difference between assets and liabilities mentioned in the balance sheet.

Investors use the P/B ratio to understand whether the stocks of a company are overvalued or undervalued.

The P/B ratio can be calculated by dividing the market price of a share by the book value per share. The market price per share is the curren...