The price-to-book ratio (P/B) compares what the market is paying for a company to its book value, which is simply what the business owns minus what it owes (its assets minus its liabilities). That figure is also called equity. Picture a small coffee shop: add up everything it owns, the machines, the furniture, the cash in the till, then subtract what it still owes the bank, and what is left is the book value, the net worth of the business on paper.
P/B just asks whether the market is pricing the shop above or below that figure. A P/B below 1 means you are paying less than that paper net worth, and for companies built mainly on physical things that has long been a classic hint of a possible bargain.
P/B is far less useful for businesses whose value is not physical, such as a strong brand, software, or patents. A software company or a strong consumer brand can be worth a fortune while owning very little you can point at, so its book value is low and the ratio looks high even when it would have been a great investment.