Price-to-book compares the market's view with the accountant's. A ratio near 1 says the market values the company at its net assets. Well below 1 says the market doubts the asset values or expects losses. Far above 1 is normal for businesses whose value is not on the balance sheet.
It is only comparable within a sector. Comparing a bank at 1.2 to a software company at 14 tells you nothing; comparing two banks at 1.2 and 0.7 tells you something worth investigating.
Example: a stock at $18 with book-value-per-share of $15 trades at a P/B of 1.2. A peer at $9 with $15 of book trades at 0.6, which means the market is pricing in losses that will eat 40% of stated equity.
Related: book-value-per-share, book-value, value-stock, pe-ratio