Price to Sales Ratio Calculator for Stock Valuation
Calculate P/S ratio, market capitalization, and revenue per share.
Enter share price, shares outstanding, and total annual revenue, then select Calculate.
About the Price to Sales Ratio Calculator
The price-to-sales ratio compares market capitalization with revenue. It is useful when earnings are negative or still small, because sales can remain positive while a company invests. P/S equals share price times shares outstanding, divided by total revenue. Revenue per share is the revenue total divided by the same share count. A P/S of 2 on $10,000 of revenue and 1,000 shares implies a $20,000 capitalization and $10 of revenue per share. Formula: market capitalization = share price × shares; P/S = market capitalization ÷ revenue; revenue per share = revenue ÷ shares. Equivalently, P/S = price ÷ revenue per share. All three inputs must be positive. Use trailing twelve-month or forward revenue consistently with the price date and the peer set. Revenue quality varies. Gross merchandise volume, billings, and recognized revenue are not interchangeable. Low-margin distributors naturally trade at lower P/S than high-margin software vendors, so compare within a business model. Share count should match the capitalization you intend—diluted shares if you want a fully diluted P/S. A cheap P/S can still be expensive if revenue is shrinking or unprofitable at any foreseeable margin. Use the price to sales ratio calculator to screen early-stage issuers, to convert a revenue forecast into an implied capitalization at a target P/S, or to check a published multiple. Pair P/S with a margin assumption before treating it as valuation. The output is a screening aid in US dollars, not a revenue forecast or investment advice. Recurring subscription revenue usually supports a higher P/S than one-off project revenue because visibility is better, while heavily discounted or pass-through sales can inflate the denominator. If a company restates revenue or changes its recognition policy, recompute the multiple on the restated series before comparing it with history. Recompute when the share price, share count, or reported sales change.
Price-to-sales examples
Price, share count, and revenue cases that match the calculator.
| Inputs | Output | Note |
|---|---|---|
| Price $20; 1,000 shares; revenue $10,000 | P/S 2; market cap $20,000.00; revenue per share $10.00 | Capitalization is twice annual revenue. |
| Price $15; 2,000 shares; revenue $15,000 | P/S 2; market cap $30,000.00; revenue per share $7.50 | The same P/S on a larger share count. |
| Price $50; 1,000,000 shares; revenue $100,000,000 | P/S 0.5; market cap $50,000,000.00; revenue per share $100.00 | A half-times sales multiple on a larger issuer. |
How to calculate price-to-sales ratio
- Enter the current share price and the shares outstanding you want in the capitalization.
- Enter total revenue for the matching reporting period.
- Select Calculate to review P/S, market capitalization, and revenue per share.
- Compare the multiple with peers that recognize revenue the same way.
Price-to-sales ratio FAQ
How is P/S calculated?
Market capitalization is share price times shares. P/S divides that capitalization by total revenue. Revenue per share is revenue divided by the same share count.
Should I use trailing or forward sales?
Use the definition that matches your peer table. Forward P/S uses estimated revenue and will be lower than trailing P/S if sales are expected to grow.
Why do some industries have much higher P/S ratios?
Expected margins differ. A software firm can support a higher sales multiple than a grocery chain because more of each revenue dollar may become profit.
Which share count should I use?
Use diluted shares if you want a fully diluted capitalization. Basic shares will understate P/S when options and convertibles are material.
Is this investment advice?
No. P/S is a screening ratio. Combine it with growth, margins, and professional advice before buying or selling shares.