Price-To-Sales Ratio - Price/Sales
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Definition of 'Price-To-Sales Ratio - Price/Sales'
A ratio for valuing a stock relative to its own past performance, other companies or the market itself. Price to sales is calculated by dividing a stock's current price by its revenue per share for the trailing 12 months:
The ratio can also be referred to as a stock's "PSR".
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Investopedia explains 'Price-To-Sales Ratio - Price/Sales'
The price-to-sales ratio can vary substantially across industries; therefore, it's useful mainly when comparing similar companies. Because it doesn't take any expenses or debt into account, the ratio is somewhat limited in the story it tells.
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If you don't know how to evaluate a company's present performance and its possible future performance, you need to learn how to analyze ratios.
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Take a look at how this effective ratio can be influenced by certain critical factors.
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This ratio reflects how many times investors are paying for every dollar of a company''s sales. See this section for explanation and calculation.
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