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EQUITY VALUATION / REVENUE MULTIPLE

Market Price-to-Sales Ratio Calculator

Compare common-equity market capitalization with revenue for one stated period.

  • 01 Calculated in this tab
  • 02 Values stay in this browser tab
  • 03 Use boundary

Conversion input

Known value

Filter by unit name, symbol, or code. Your current selections remain available.

Scenario inputs

Preparing the calculator...

METHOD / WORKED EXAMPLE

Put an equity price beside the revenue base

Price-to-sales remains calculable when earnings are negative, but revenue quality and the costs required to produce it determine whether comparisons are useful.

WORKED DEFAULT

Check the calculation with the default inputs

A $5 million common-equity market value divided by $4 million of matching revenue produces a price-to-sales ratio of 1.25x.

  1. Read market equity$5.00m
  2. Read period revenue$4.00m
  3. Divide$5.00m / $4.00m = 1.25x

READ THE RESULT

Interpret the output in context

Pair the multiple with gross margin, operating margin, growth durability, dilution, debt, cash, customer concentration, and revenue-recognition quality.

ASSUMPTIONS AND LIMITS

Know where the model stops

  • Revenue and market value use compatible entity scope.
  • The revenue period is labelled.
  • Recognition policies and capital structures are considered.

Price-to-sales ignores debt and can differ materially from enterprise-value-to-sales for leveraged or cash-rich companies.

NYU Stern: price-to-sales valuation

COMMON QUESTIONS

Market Price-to-Sales Ratio Calculator FAQs

Can price-to-sales compare companies with losses?

It can be calculated when net income is negative because revenue remains the denominator, but calculable does not mean comparable. Companies can have radically different gross margins, operating costs, reinvestment needs, debt, dilution, and revenue quality. Use a consistent revenue period and examine the path from revenue to sustainable cash flow before comparing multiples.

Why might enterprise-value-to-sales be preferable?

Price-to-sales uses common-equity market value and therefore reflects capital structure indirectly. Enterprise-value-to-sales includes the entered debt-like claims and subtracts non-operating cash, making it more consistent for comparing operating assets across differently financed firms. Whichever multiple you use, align consolidation scope, lease treatment, revenue period, and non-operating asset classifications across the comparison set.

Should the denominator use trailing or forecast revenue?

Use the period that matches your stated analysis and comparison data. Trailing revenue is observed but can lag a rapidly changing business; forecast revenue introduces estimation risk. Label the period, source, currency, and recognition convention. Do not compare a current market value divided by stale revenue with peers using forward estimates without explicitly adjusting the analysis.

Use boundary

Calculation path

Divide common-equity market capitalization by revenue for the explicitly selected historical or forecast period.

Calculation path

Price-to-sales = common-equity market value / revenue.