Definition of Price to Sales (Price/Sales) Ratio

Definition of Price to Sales (Price/Sales) Ratio

Definition: What is Price to Sales (Price/Sales) Ratio?

Price to sales ratio also called P/S ratio. it is the financial ratio that compares the company’s stock price with total revenue of the company to measure the value investor put on the company for each dollar of revenue generated by the company.

Definition of Price to Sales (Price/Sales) Ratio

It is most basic and easy to understand ratio because of which investors use it mostly. Those companies which have negative income or zero income just like the startups’ companies can use this ratio because for such type of companies this is the very useful ratio.

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