Income Statement

EV / Sales

Compares the market price with sales recognized by the company or with an earnings, sales, cash -flow or book-value base. It does not say whether a company is good; it translates growth expectations, risk and profitability into a comparable number.

Browse this section Versión en español

EV / Sales

evToSales · Income Statement

Link

Definition: Compares the market price with sales recognized by the company or with an earnings, sales, cash-flow or book-value base. It does not say whether a company is good; it translates growth expectations, risk and profitability into a comparable number.
Calculation: Enterprise value / revenue.
Uses: Useful for comparing similar businesses and spotting gaps between price, quality and growth. Weak for cyclicals away from mid-cycle, banks with operating multiples, early biotech and companies without normalized profits. Cross-check DCF, own history, peers, FCF yield, ROIC and debt.