What is the average price to sales ratio? (2024)

What is the average price-to-sales ratio?

Price-to-sales (P/S) ratios of one to two are regarded as good, and P/S ratios of less than one are considered exceptional. P/S ratios, like other stock valuation indicators, vary greatly by industry.

(Video) Price-to-Sales (P/S) Ratio Basics
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What is considered a good price-to-sales ratio?

While the ideal ratio depends on the company and industry, the P/S ratio is typically good when the value falls between one and two. A price-to-sales ratio with a value less than one is better.

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What is an example of price-to-sales ratio?

Sales for the past 12 months (TTM) = $455 million (sum of all FY1 values) Sales per share (TTM) = $4.55 ($455 million in sales / 100 million shares outstanding) P/S ratio = 2.2 ($10 share price / $4.55 sales per share)

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What is a reasonable PS ratio?

From an investment perspective, a low price-to-sales ratio (1.0 or less) may indicate a good buy with a stock price that is undervalued. Higher price-to-sales (P/S) ratios, such as 2.0 to 3.0, display a strong market price and perhaps an equally strong company.

(Video) What Is A Price To Sales Ratio? [Episode 487]
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How do you calculate price-to-sales ratio?

The price-to-sales ratio (Price/Sales or P/S) is calculated by taking a company's market capitalization (the number of outstanding shares multiplied by the share price) and divide it by the company's total sales or revenue over the past 12 months. 1 The lower the P/S ratio, the more attractive the investment.

(Video) Price To Sales Ratio Explained
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Is it good to have a high price-to-sales ratio?

The ratio describes how much someone must pay to buy one share of a company relative to how much that share generates in revenue for the company. Generally speaking, the lower the P/S ratio, the better.

(Video) Why the P/S Ratio is My Favorite Valuation Metric
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What is a price to sale ratio of 1?

If the price-to-sales ratio is 1, investors are paying $1 for every $1 of revenues generated by the company. So, a stock with a price-to-sales below 1 is a good bargain as investors need to pay less than a dollar for a dollar's worth.

(Video) Introduction to the Price-to-Sales Ratio
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What is a good percentage of sales?

What is a good return on sales? For most companies, a ROS between 5% and 10% is excellent. This may not seem like much, however, if your business is heading into financial trouble, this number would be in the negative.

(Video) What Is The Price To Sales (P/S) Ratio?
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What is an acceptable price point?

an expectation in the minds of consumers regarding price levels for a product category; consumers are reluctant to buy below the acceptable price range for fear that the product will be inferior, or above it because the expected benefit of the product is not worth the price. +1 -1.

(Video) How to Use the Price to Sales Ratio for Finding Value
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Should price-to-sales ratio be high or low?

The Price-to-Sales Ratio

Analysts prefer to see a lower number for the ratio. A ratio of less than 1 indicates that investors are investing less than $1 for every $1 the company earns in revenue.

(Video) What is Price to sales ratio | Advantages & Disadvantage P/S Ratio | Price to sales ratio explained

What is PV ratio with example?

P/V ratio =contribution x100/sales (*Contribution means the difference between sale price and variable cost). Here contribution is multiplied by 100 to arrive the percentage. For example, the sale price of a cup is Rs. 80, its variable cost is Rs. 60, then PV ratio is (80-60)× 100/80=20×100÷80=25%. .

(Video) Price to Sales Ratio For Beginners Explained
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Is price-to-sales ratio important?

Price / Sales ratio measures what the market is willing to pay for every rupee of sales per share. Especially in case of high growth sectors, the P/S ratio can be very useful as a valuation measure.

What is the average price to sales ratio? (2024)
What is the average price-to-sales ratio of Nasdaq?

As of today, Nasdaq's share price is $58.84. Nasdaq's Revenue per Share for the trailing twelve months (TTM) ended in Sep. 2022 was $12.50. Hence, Nasdaq's PS Ratio for today is 4.71.

Why is a low price-to-sales ratio good?

In general, a low price to sales ratio means a good investment because investors are paying less for each unit of sales. However, price to sales sometimes provide very limited information because it does not take into account any expenses or debt and a company with high sales maybe unprofitable.

What does a ratio of 1 25 mean?

A ratio of 1:25 means add 1 part of product to 25 parts of water. Example: to mix a product with a ratio of 1:10 measure: 1 capful of cleaning product and add it to. 10 capfuls of water. Using liquid measures.

What does a ratio of 1.5 1 mean?

Thanks for your help. Melody, The ratio 1.5:1, which is read "1.5 to 1" means that the length is 1.5 times the width. So, for example if your paper is 2 inches in width then the length is 1.5 × 2 = 3 inches.

What is the average price sales ratio of S&P 500?

S&P 500 Price to Sales Ratio
Min:0.80(Mar 2009)
Max:3.04(Dec 2021)

What is a good net profit to sales ratio?

In the retail sector, for example, anything between 0.5% to 3.5% is considered a good net profit ratio. This might not, however, be considered good for other businesses. In general, though, aiming for a net profit ratio of 10% - 20% is considered average.

What is the average P E ratio for retail?

The total comes to 452.55. Divide this by seven, and you get 64.65—the average current P/E ratio for the retail sector overall.
Calculating the P/E Ratio of the Retail Sector.
Retail CategoryCurrent P/E Ratio
Grocery and Food40.60
3 more rows
Jun 30, 2021

What is an acceptable profit percentage?

But in general, a healthy profit margin for a small business tends to range anywhere between 7% to 10%. Keep in mind, though, that certain businesses may see lower margins, such as retail or food-related companies. That's because they tend to have higher overhead costs.

What percentage of sales should be profit?

An NYU report on U.S. margins revealed the average net profit margin is 7.71% across different industries. But that doesn't mean your ideal profit margin will align with this number. As a rule of thumb, 5% is a low margin, 10% is a healthy margin, and 20% is a high margin.

What is an acceptable return on sales ratio?

What is a good return on sales? For most companies, a ROS between 5% and 10% is excellent. This may not seem like much, however, if your business is heading into financial trouble, this number would be in the negative. If ROS is above 0%, you are turning a profit.

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