Valuation
EV/Sales
Enterprise value divided by revenue — price-to-sales corrected for debt and cash.
How it works
Because enterprise value counts debt and subtracts cash, EV/Sales compares companies with very different capital structures fairly, where P/S does not.
Related terms
- Enterprise valueWhat it would cost to buy the whole business: market value plus debt, minus cash.
- Price-to-salesMarket value divided by annual revenue — a multiple that still works when there are no profits.
- EV/EBITDAEnterprise value divided by earnings before interest, tax, depreciation and amortisation.
More in Valuation
Educational reference only. Nothing here is investment advice or a recommendation to buy or sell anything, and tax treatment depends on your own circumstances and the country you are in.