Ten Stock Analysis Ratios Used By The Pros: Price-to-Sales
Fourth Key Ratio :
As with all ratios mentioned, Price-to-Sales is most useful when comparing companies in the same industry group. Earnings may be small or non-existence in young companies or those in the midst of a period of rapid growth. Price-to-sales takes the top line revenue as the denominator in this ratio to focus on the cash generating capabilities of a company.
Price-to-Sales Ratio = Market Capitalisation/Revenue