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Price-to-Sales Calculator

Calculate the price-to-sales (P/S) ratio in seconds and see if it is cheap or rich — ideal for companies without profits yet. Free, with formula and benchmarks.

Also available in German: Kurs-Umsatz-Verhältnis (KUV) Rechner →

Inputs

Market capitalization

Also called: Market cap, MVE (market value of equity)

Where to find it: Shown prominently on any stock overview page.

How to derive: Share price × shares outstanding.

Revenue

Also called: Sales, turnover, top line

Where to find it: Income statement, very first line.

How to derive: Units sold × price; stated directly in the income statement.

%

Margin

Also called: Profit margin (gross/net)

Where to find it: Income statement: respective profit ÷ revenue.

How to derive: Gross margin = gross profit ÷ revenue; net margin = net income ÷ revenue.

Result — live

P/S
–
Implied P/E
–

P/S only means something with margin context: P/S 2 at a 20% margin = P/E 10; at a 2% margin = P/E 100.

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The price-to-sales ratio (P/S) compares the market value of a company to its annual revenue — the one multiple that still works when profits are thin or negative. This calculator divides market cap by sales in seconds and, if you add a net margin, shows the P/E those sales would imply.

How the formula works

Divide the whole market capitalization by yearly revenue and you get the P/S ratio. Because it ignores costs, a thin margin needs a low P/S to be cheap — so the calculator also turns sales into an implied P/E using the margin you enter.

P/S = market cap ÷ annual revenue
Implied P/E = market cap ÷ (revenue × net margin)

Example: A company worth $5,000m earns $2,500m in revenue at an 8% net margin. P/S = 5,000 ÷ 2,500 = 2.0. The same sales imply a P/E of 25 — average revenue value, but a rich earnings multiple because the margin is thin.

How to read the result

  • Below 1.5 — cheap relative to revenue, especially if margins are healthy.
  • 1.5 to 4 — the average range for most companies.
  • Above 4 — a rich revenue multiple; only fast growth or fat margins justify it.

What to watch out for

  • Margins decide everything. P/S 2 at a 20% margin is a P/E of 10; at a 2% margin it is a P/E of 100.
  • Revenue is not profit. Growing sales that never turn into cash can still destroy value.
  • Compare within a sector. Software carries far higher P/S than retail.

Frequently asked questions

When is the price-to-sales ratio useful?
It shines for young, fast-growing or temporarily loss-making companies that have no meaningful P/E yet. Sales are harder to distort than earnings, so P/S gives an early read on valuation.
What does the implied P/E tell me?
It converts the sales multiple into an earnings multiple using your margin assumption. It reveals whether a modest-looking P/S hides an expensive profit valuation because margins are slim.
Where do I get revenue and market cap?
Revenue comes from the annual income statement, market cap from price times shares. In our Fair Value Calculator both are already on file for 12,000+ stocks — no typing required.

Not financial advice · No buy/sell recommendations · Past performance is not a guarantee of future results.