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P/S Ratio (Price-to-Sales)

Market cap divided by revenue.

The price-to-sales ratio values a company's equity relative to its revenue. Unlike P/E, it works for companies with negative earnings. It is capital-structure-dependent (unlike EV/Revenue), so it should be used with caution when comparing companies with different leverage levels.

Formula
P/S=Market CapRevenue\text{P/S} = \frac{\text{Market Cap}}{\text{Revenue}}
Related Terms

P/E Ratio

Share price divided by earnings per share — how much you pay per dollar of profit.

P/B Ratio (Price-to-Book)

Share price divided by book value per share.

Market Capitalization

Share price multiplied by shares outstanding — the total equity value.

Enterprise Value (EV)

Market cap plus net debt — the total acquisition value of the business.

EV/EBITDA

Enterprise value divided by EBITDA — a capital-structure-neutral valuation metric.

EV/FCF

Enterprise value divided by free cash flow (TTM).