Price to book value (market cap/Book value) is actually a metric of:
PE x ROE which is equal to :
(price/earnings) x (earnings / equity) where equity = net book value (asset-libailbities)
therefore another way to write this is:
(ROE – g) / (r – g)
where g is the growth rate and r is the cost of equity/required rate of return.
If we assume a zero growth rate, the equation implies that the market value of equity should be equal to the book value of equity if ROE = r.
Price/Book value will be higher than 1 if a company delivers ROE higher than the cost of equity, and below that if the return is lower than the cost of equity.
Another way to look at this is that if a company is losing money and is projected by the market to continue to lose money, then it should trade for LESS than the assets are currently worth because they will continue to erode in the future (versus increase, which generally fetches a premium to book value).