EV/Sales
Enterprise Value to Sales
Valuation RatiosA multiple comparing firm value to revenue. Used when earnings are negative or temporarily depressed, since revenue is harder to manipulate than profit.
Formula
EV/Sales = Enterprise Value / Annual Revenue
Why it matters
It is often the only usable multiple for loss-making growth companies, but it says nothing about profitability, so it must be paired with a view on future margins.
Indian example
Related terms
Learn the concept
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