EV/Sales

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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, denominated 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[edit]

  1. ^ Staff, Investopedia (3 July 2005). "Enterprise-Value-To-Sales - EV/Sales". 
  2. ^ Ltd, Market Oracle. "Valuing Cyclical Companies by Using the Price/Sales Ratio :: The Market Oracle ::". www.marketoracle.co.uk. 

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