Equity Valuation

Price-to-Sales Ratio

Definition

What is Price-to-Sales Ratio?

Market capitalisation divided by revenue, or share price divided by sales per share.

Example in practice

A ₦20 billion company with ₦10 billion sales trades at two times sales.

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Net income attributable to ordinary shareholders divided by weighted average ordinary shares.

Earnings per share assuming potentially dilutive securities convert into ordinary shares.

Earnings per share calculated using actual weighted average ordinary shares outstanding.

Cash generated or used by a company's core operations.

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