How is the Price-To-Sales Ratio different from the Price-To-Earnings Ratio?

The P/S Ratio compares market value to revenue, while the P/E Ratio compares market value to earnings, making P/S useful for companies with fluctuating profits.

What is a good Price-To-Sales Ratio?

A good P/S Ratio varies by industry, but lower values generally indicate more attractive valuations, especially if revenue growth is strong.

Can a low Price-To-Sales Ratio indicate a bad investment?

Not always. A low P/S Ratio may signal undervaluation, but it could also indicate weak revenue growth or operational challenges requiring further investigation.

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What is PRICE-TO-SALES RATIO (P/S RATIO)?

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