The Price-to-Sales (P/S) ratio compares a company's stock price to its annual revenue per share. It is particularly useful for valuing companies that are not yet profitable (like many tech startups). A P/S below 1 is often considered cheap; above 10 is expensive. Unlike the P/E ratio, it can be used for loss-making companies.
Related Terms
The Price-to-Earnings (P/E) ratio measures how much investors are paying for each dollar of a compan...
Earnings Per Share (EPS) is a company's net profit divided by its total number of outstanding shares...
Book value is a company's total assets minus its total liabilities — essentially what would be left ...
Free cash flow (FCF) is the cash a company generates from its operations after spending on capital e...
Market Navigator Glossary — plain-English definitions of 93+ investing and crypto terms. All content is for educational purposes only and does not constitute financial advice.