A P/S (or price-to-sales) ratio is a valuation tool is used by investors to determine how a company’s share price compares to its annual revenue. A company’s P/S ratio can also be thought of ...

Explore some of the primary financial risk ratios that investors and analysts commonly use to evaluate a company's overall ...

Calculating activity ratios involves analyzing various components of a company’s financial statements, with the exact formula varying ... a company converts its sales into actual profit ...

Asset turnover ratio calculates efficiency of asset use to generate sales; formula: Total Sales ÷ Average Assets. Higher asset turnover indicates better capital use and operational efficiency ...

Here are the parts of the formula: Days inventory outstanding ... managing its assets and liabilities to produce sales, while a lower ratio might signal underutilization of available resources.

Or divide a stock's price by sales per share. A lower price-to-sales ratio suggests you've found a bargain, or a value stock. Industry consensus says lower-P/S stocks have better value because ...

Since the quick ratio doesn’t include inventory in its calculation, it may be a better liquidity indicator in some situations. Similarly, not all companies have stable sales over the course of ...