Enterprise Value to Sales

Compare a company's total value against its revenue to assess how the market prices growth relative to peers.

EV/Sales Calculator

Market Capitalization ($)

Total Debt ($)

Cash and Cash Equivalents ($)

Annual Revenue ($)

Enterprise Value Components

Market Cap:

Total Debt:

Less: Cash:

Enterprise Value:

EV/Sales Ratio

Valuation Metrics

Revenue:

EV per $1 Revenue:

Valuation Category:

Industry Benchmarks

Ratio Analysis

Interpretation

Your EV/Sales Ratio:

Key Insights

Understanding EV/Sales Ratio

Formula

EV/Sales = Enterprise Value ÷ Annual Revenue

EV = Market Cap + Total Debt - Cash

When to Use

• Comparing companies in the same industry
• Valuing unprofitable but growing companies
• Analyzing revenue-based valuations
• Identifying potentially undervalued stocks
• Screening investment opportunities

Advantages

• Works for loss-making companies
• Less volatile than earnings-based ratios
• Good for comparing capital structures
• Useful for cyclical businesses

Limitations

• Ignores profitability differences
• Doesn't account for cost structures
• May not reflect growth prospects
• Can be misleading for asset-heavy industries

Pro Tips

• Compare EV/Sales ratios within the same industry for meaningful analysis
• Consider growth rates - higher ratios may be justified for faster-growing companies
• Use trailing twelve months (TTM) revenue for more current valuations
• Combine with other metrics like EV/EBITDA and P/E ratios for complete analysis
• Be cautious with extremely high or low ratios - investigate underlying reasons

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