Valuation Terms
Price to Sales Ratio
A ratio comparing market value to revenue.
Also called: P/S ratio, price to revenue
What it means
The price-to-sales ratio compares a company’s market capitalization to its revenue, or price per share to sales per share. It is often used when earnings are weak, negative, or highly volatile.
Why it matters
It helps users compare valuation when profit measures are less reliable, though sales alone do not guarantee business quality.