B

Glossary

Price-to-Sales

Also: P/S

Important — standard screening

What it measures

Price relative to sales. Useful for unprofitable companies where P/E doesn't apply.

Formula

Market Cap / Revenue

Benchmark

< 2 cheap · > 5 expensive

Related metrics

EV/SalesP/EGross Margin

Source

Fisher, Common Stocks and Uncommon Profits (1958)

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Price-to-Free-Cash-Flow

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Quick Ratio