Work out price to sales ratio instantly with clear inputs, formula shown and shareable results.
Price to sales works where earnings are absent or distorted, since revenue is harder to manipulate. Dividing it by the net margin recovers the implied P/E, which shows the profitability the multiple is really assuming.
Price to sales
P/S = price / revenue per share; implied P/E = P/S ÷ net margin
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
For loss-making or early-stage companies, and for cyclical firms at a trough in earnings.
It ignores costs entirely. Two firms with identical revenue can have completely different economics.