A Company's Book Value is defined by Investopedia as follows:
1. It is the total value of the company's assets that shareholders would theoretically receive if a company were liquidated.
2. By being compared to the company's market value, the book value can indicate whether a stock is under- or overpriced.
The Price to Book ratio is used to compare a stock's market value to it's book value. The following stocks have been beaten down to the point where their market price is actually less than their liquidation value (book value). Therefore in a way the company is getting little credit for any future earnings, and in fact the market is betting earnings will decline and is valuing the company at less than the sum of it's parts. Another way to look at it is that the market is betting that book value will decline due to company specific issues.
TD Bank (TD) 0.96x book
CP Rail (CP) 0.93x book
Petro Canada (PCA) 0.83x book
General Electric (GE) 0.86x book
Ford Motor (F) 0.75x book
Bank of Montreal (BMO) 0.81x book
Dow Chemical (DOW) 0.54x book
When you look at the Price to Book ratio for a stock it is important to note what assets the company owns and how they earn money. For example Microsoft (MSFT) has a very high Price to Book ratio of 4.4x because their main income source is from selling software that smart people develop in offices, versus Toyota Motor (TM) who manufactures automobiles in enormous facilities filled with expensive equipment and supplies; they have a low Price to Book of just over 1x.
Generally companies that own and market softer goods bearing well recognized brands and having competitive advantages will have higher Price to Book ratios. This contrasts against more economically sensitive firms, and hard goods firms who's goods or services trend more toward commodities and less towards brands and intellectual property.