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Price to Sales ratio - This ratio is used for unprofitable companies, which don't have a price to earnings ratio. The price to sales ratio is the capitalized value of stock, divided by the sales of stock in the past 12 months. The calculated value is the same if the calculation is made per share or for the entire value of the company. A low price to sales ratio is usually a sign to investors that the investment is a good one, but the price to sales ratio does not show the entire picture of the state that a company is in. |
Spend Less Than You Earn
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