price to sales ratio

Term of the Day - price to sales ratio


A stock's capitalization divided by its sales over the trailing 12 months.
The value is the same whether the calculation is done for the whole company
or on a per-share basis. A low price to sales ratio (for example, below
1.0) is usually thought to be a better investment since the investor is
paying less for each unit of sales. However, sales don't reveal the whole
picture, since the company might be unprofitable. Because of the
limitations, price to sales ratio are usually used only for unprofitable
companies, since such companies don't have a price/earnings ratio (P/E
ratio).
SATBIR SINGH
PRESIDENT
MEMBER JAB WE MET CA
REDEFINING PROFESSIONALISM……





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