The price-sales ratio is especially useful when analyzing firms that have:
A) volatile market prices.
B) negative earnings.
C) positive PEG ratios.
D) a high Tobin's Q.
E) increasing sales.

Question

Quizplus · Accepted Answer

The price-sales ratio is particularly useful for analyzing firms with negative earnings because it allows investors to value a company even when it's not profitable, unlike metrics that rely on earnings or cash flow.

The Price-Sales Ratio Is Especially Useful When Analyzing Firms That