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Price-to-Sales (P/S) Ratio Calculator

Calculate the Price-to-Sales (P/S) ratio of a company to evaluate its revenue-based valuation.

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Calculation Parameters

Specify your inputs below.

Calculated Result

Price-to-Sales (P/S) Ratio 4.00
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Expert Tip

P/S ratios are useful to value cyclical or turnaround stocks where earnings are temporarily negative or highly volatile.

How this Calculator Works

This calculator computes the Price-to-Sales (P/S) ratio, which compares a company's stock price or market capitalization against its sales revenues. It is particularly useful for valuing growth companies or startups that are not yet profitable. Value investors use it to filter opportunities.

Formula & Methodology

P/S Ratio = Stock Price / Sales per Share Sales per Share = Total Revenue / Outstanding Shares - Stock Price is the current market price of the stock. - Total Revenue represents the company's gross sales over a year. - Outstanding Shares is the count of shares in circulation.

Step-by-Step Calculation Example

Here is a step-by-step example showing how the calculations are performed:

A company has 1,000,000 outstanding shares trading at $20 per share, and reports annual revenue of $5,000,000. 1. Calculate sales per share: $5,000,000 / 1,000,000 shares = $5.00 per share. 2. Divide stock price by sales per share: $20 / $5.00 = 4. Result: The Price-to-Sales (P/S) ratio is 4.0.

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PEG Ratio Calculator

Calculate the Price/Earnings-to-Growth (PEG) ratio to adjust company P/E multiples by expected growth rates.

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EV/EBITDA Calculator

Compute Enterprise Value to EBITDA multiples to evaluate company acquisition price structures.

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Detailed Insights & Expert Guide

ℹ️ About this Calculation

This equity research and valuation calculator evaluates corporate fundamentals, stock price multiples, cost of capital, dividend discount models, and shareholder return metrics based on SEC financial reporting and Wall Street equity analysis standards.

Variable Glossary

Input

Equity Inputs

Share price, earnings per share (EPS), dividend amount, book value, debt/equity ratio, or systematic beta coefficient.

Parameter

Valuation Output

Price-to-Earnings (P/E), EV/EBITDA multiple, Intrinsic Value ($), WACC %, or Return on Equity (ROE %).

How to Calculate Step-by-Step

1

Step 1

Input current stock price, shares outstanding, or balance sheet / income statement numbers.

2

Step 2

Enter expected growth rate, cost of equity, or market risk premium assumptions.

3

Step 3

Review calculated valuation multiples, margin of safety comparison, or required rate of return.

FAQ

What is WACC and why is it crucial for equity valuation?
Weighted Average Cost of Capital (WACC) represents a company's required average return on debt and equity capital. It is used as the hurdle rate to discount future cash flows in DCF valuation models.
How does stock Beta measure systematic risk?
A stock beta of 1.0 means price volatility matches the broader market index. Beta > 1.0 indicates higher volatility, while Beta < 1.0 reflects lower systematic volatility.
Should valuation multiples be evaluated in isolation?
No. Valuation ratios (P/E, EV/EBITDA, P/B) should always be benchmarked against industry peer groups, historical trading averages, and expected earnings growth (PEG ratio).