P/S Ratio (Price to Sales Ratio)

A valuation metric comparing a company's market capitalization (or share price) to its revenue, most useful for comparing companies that aren't consistently profitable yet, where P/E isn't meaningful.

Definition

Price to Sales Ratio – A valuation metric comparing a company's market capitalization (or share price) to its revenue, most useful for comparing companies that aren't consistently profitable yet, where P/E isn't meaningful. Found In: Market Data, Income Statement Formula:

P/S Ratio = Market Capitalization / Revenue