Price to Tangible Book
Calculate the price to tangible book ratio, the market value of the common equity against its book value without goodwill and other intangible assets.
Goodwill and acquired intangibles cannot be sold separately and are written off first when a company gets into trouble, so the tangible book value is the more conservative measure of what the shareholders own. The ratio is the usual valuation measure for banks and insurers, whose assets are mostly financial, and shows for acquisitive companies how much of the price is paid for past acquisitions.
The formula is as follows:
\[\text{Tangible Book Value} = \text{Total Shareholder Equity} - \text{Preferred Stock} - \text{Goodwill and Intangible Assets}\] \[\text{Price to Tangible Book} = \text{Market Capitalization} / \text{Tangible Book Value}\]The market capitalization uses the same close and shares as the price to book ratio (get_price_to_book_ratio), so both differ only by the goodwill and intangibles. A tangible book value of zero or less (common after large acquisitions or buybacks) gives NaN.
Also known as: P/TBV, price to tangible book value, price to tangible equity, P/TB.
Price to Tangible Book in Python or via the MCP
Install the Finance Toolkit with:
pip install financetoolkit -U
Then call get_price_to_tangible_book_ratio as shown below.
from financetoolkit import Toolkit
toolkit = Toolkit(
["JPM", "C", "WFC"],
api_key="FINANCIAL_MODELING_PREP_KEY",
start_date="2021-01-01",
end_date="2025-12-31",
)
toolkit.ratios.get_price_to_tangible_book_ratio()
Or, after setting up the Finance Toolkit MCP, ask:
What was the price-to-tangible-book ratio of JPMorgan Chase, Citigroup and Wells Fargo from 2021 to 2025?
Which returns:
| 2021 | 2022 | 2023 | 2024 | 2025 | |
|---|---|---|---|---|---|
| C | 0.7874 | 0.562 | 0.616 | 0.8017 | 1.2871 |
| JPM | 2.3656 | 1.9517 | 2.1204 | 2.6528 | 3.2247 |
| WFC | 1.467 | 1.2662 | 1.3809 | 1.9093 | 2.251 |
Parameters
get_price_to_tangible_book_ratio accepts the following parameters.
| Parameter | Type | Description | Example |
|---|---|---|---|
show_daily | bool | Whether to show daily values: the close of each trading day against the balance sheet of the latest period that has ended on or before that day (also when it ended before the start date), so no figures are used before their period closes. Defaults to False. | True |
diluted | bool | Whether to use diluted shares in the calculation. Defaults to True. | False |
rounding | int | None | The number of decimals to round the results to. Defaults to None, which uses the rounding of the Toolkit (4 unless set otherwise). | 2 |
growth | bool | Whether to calculate the growth of the ratios. Defaults to False. | True |
lag | int | list[int] | The lag to use for the growth calculation. Defaults to 1. | 4 |
compound | bool | Whether the growth is the compound annual growth rate over the lag (e.g. lag=5 for the five-year CAGR) instead of the total change. Defaults to False. | False |
standardize | bool | Whether to standardize (Z-Score) the result. When combined with growth=True, standardizes the growth values instead of the raw values. Defaults to False. | True |
trailing | int | The number of period ends to average the balance sheet items over, as for the price to book ratio. Defaults to None, which uses the balance sheet at the end of each period. | 4 |