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Enterprise value-to-sales ratio

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Enterprise value/sales is a financial ratio that compares the total value (as measured by enterprise value) of the company to its sales. The ratio is, strictly speaking, nominated in years; it demonstrates how many dollars of EV are generated by one dollar of yearly sales. Generally, the lower the ratio, the cheaper the company is.[1] Some investment professionals believe—as enterprise value and sales both consider debt and equity holders—EV/Sales is superior to the oft quoted price/sales ratio.[2]

References

  1. ^ http://www.investopedia.com/terms/e/enterprisevaluesales.asp
  2. ^ http://www.marketoracle.co.uk/Article6552.html
  • "Enterprise-Value-To-Sales - EV/Sales". Investopedia.
  • "Valuing Cyclical Companies by Using the Price/Sales Ratio". The Market Orcale. September 30, 2008.
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