Glossary › price-to-sales ratio
Trading glossary · fundamentals
price-to-sales ratio
A number comparing what the whole company is worth on the market with how much it sells in a year.
The fuller meaning
Market value divided by yearly revenue, useful for companies that are not yet profitable, where P/E cannot be used. It ignores costs and profit margins, so a low P/S is only attractive if sales can turn into profit.
price-to-sales ratio, also called P/S, price-to-sales.
Related words
adoption · analyst estimate · balance sheet · Bank of Japan · beat · bond · book value · business cycle · cash flow · central bank