Price-To-Sales Ratio - Price/Sales

What does it Mean? 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:

Price-To-Sales Ratio (Price/Sales)


The ratio can also be referred to as a stock's "PSR".
Investopedia Says... 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.

Terms Related Links

Price Multiple
Price-Earnings Ratio - P/E Ratio
Price/Earnings To Growth - PEG Ratio
Revenue
Sales Per Share

Terms Related Links
Ratio Analysis Tutorial - 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.

Use Price-To-Sales Ratios To Value Stocks - Take a look at how this effective ratio can be influenced by certain critical factors.

Analyze Investments Quickly With Ratios - Make an informed decision about your investments with these easy equations.

Investment Valuation Ratios: Price/Sales Ratio - This ratio reflects how many times investors are paying for every dollar of a company''s sales. See this section for explanation and calculation.

Peer Comparison Uncovers Undervalued Stocks - Learn how to put one of the top equity analysis tools to work for you.

Introduction To Fundamental Analysis - Learn this easy-to-understand technique of analyzing a company's financial statements and reports.




add investopedia foot
www.investopedia.com