A good price to book ratio: 994 under 1

On 2026-09-07, 994 of the 3,972 US listings holding a price to book ratio traded below stated book value, or 25.0 percent. Price below book is the oldest screen in the business, and it is also the one where the denominator does the most work and gets the least attention, because book value is an accounting total rather than a thing and what is inside it changes what the ratio means.

The screener held a price to book ratio for 3,972 of its 5,257 listings that day. It held a price to tangible book ratio for 3,672 listings, and 827 of those traded below tangible book, or 22.5 percent.

The interesting part is not the gap between 25.0 and 22.5. It is what happens when you look at the bottom of each distribution.

Two distributions that should nest, and do not

The 994 has an independent check. The published price to book distribution, built on the same day from a deduplicated cohort of 3,363 companies whose filed statements are on record, puts the 25th percentile at 1.14 and the 10th at 0.60. A quarter of that cohort sits below 1.14, so slightly under a quarter sits below 1.00, which is where the 25.0 percent measured across 3,972 listings lands. The two populations are not the same, and they agree anyway.

Take the bottom row of the arithmetic seriously for a moment. Tangible book value is book value with goodwill and other intangibles removed, so it is always the smaller of the two. A smaller denominator makes a larger ratio. For any company where both figures exist, price to tangible book must be at least as large as price to book.

If that held here, every listing below 0.20 on tangible book would also be below 0.20 on book, and the tangible count could not exceed the ordinary one. It does: 221 against 212.

The reason is that they are not the same measurement

Price to book, as stored, prefers the data vendor's published trailing twelve month ratio when one exists, and falls back to our own calculation from the filed balance sheet only when it does not. Price to tangible book is always our own calculation: market capitalisation divided by shareholders equity less goodwill less other intangibles, straight from the filed statements.

So for a large part of the market, the numerator and the denominator of the first ratio were assembled by somebody else, on a period that mixes twelve months of one thing with a balance sheet dated somewhere inside it, and the second was assembled here from one filed statement. Subtracting one from the other does not isolate goodwill. It also picks up every difference between the two sources.

This is not a defect being confessed to reluctantly. It is why every figure in this product carries its basis and its source: two ratios that look like they differ by one balance sheet line can differ by a great deal more, and the only way a reader finds out is if the page says so.

The 300 listings with no tangible book ratio at all

The price to book ratio exists for 3,972 listings. The tangible version exists for 3,672. The 300 in between are the more interesting group.

Tangible book is withheld when tangible equity is zero or negative, which happens when goodwill and intangibles are worth as much as the whole of shareholders equity or more. That is the ordinary result of a large acquisition paid for above the target's book value.

For those 300, the reported book value that makes the price to book ratio computable consists entirely of items that would not survive a writedown. They can appear on a screen for companies trading near or below book. They cannot appear on a screen for companies trading near or below tangible book, because for them there is no tangible book to trade below.

What Graham's number actually was

The threshold usually attached to this ratio is 1.5, not 1.0, and it comes from chapter 14 of the 1973 revision of Graham's book, where it sits beside a combined test: price to earnings multiplied by price to book at or below 22.5. The single ratio was never meant to be read alone.

There is a second reason not to read it alone, and it is structural rather than historical. Book value records what was bought and capitalised. It does not record what a company built without capitalising it: brands, software written in-house, research, trained staff. A business whose assets are mostly of that kind will trade at a high multiple of book for its whole life without anything being wrong, and a business with heavy machinery on the books will trade near book for its whole life without anything being right.

Reading the count

Three things the 994 does and does not support.

It is a count of listings, not of companies or of opportunities. A company with two share classes appears twice, and both classes carry the same book value per share.

Below book value is a description, not a diagnosis. A price below book can mean the market disbelieves the book, and the market is often correct about that: an asset carried at cost that will never earn its cost is worth less than its carrying value, and the balance sheet is the last place to learn it.

The comparison worth making is within an industry. A quarter of the market trading below book sounds like a market-wide statement. It is mostly a statement about which industries are in the sample, because asset intensity varies more between industries than the ratio varies inside them.

What this leaves out

Every count is a single reading of the public screener on 2026-09-07, on prices stamped 2026-08-26. The pipeline rewrites these figures nightly.

The two ratios are computed on different bases, which is the point of the third section and also a limit on every comparison between them here. Nothing above should be read as one figure being the corrected form of the other.

The inference that the 300 listings with a price to book but no tangible equivalent have non-positive tangible equity follows from the rule that withholds the figure. It is not a direct measurement of those 300 companies' balance sheets, and a small number of them may be missing the figure for an unrelated reason.

Neither ratio is held for the whole pool. Price to book is withheld entirely when shareholders equity is zero or negative, so companies in that state are absent from the denominator as well as from the count, and there are more of them than this page can measure.

None of this is a view on any company, and a low ratio here is not a statement that anything is worth buying.