Price to Sales Ratio
Formula: Price to Sales Ratio = Stock Price / Sales per Share
The Price to Sales (P/S) Ratio is a valuation ratio that compares a company's stock price to its revenues. It is calculated by dividing the stock price by the sales per share. The P/S ratio is useful for comparing the value of companies with different profit margins, especially in industries where earnings are not consistently profitable. It is a useful tool for investors to gauge a company's value in relation to its sales.