High price/sales multiples go with high profit margins.

Name: High price/sales multiples go with high profit margins.
Brand: Quizplus
Rating: 4.7 (48 reviews)

Question

Quizplus · Accepted Answer

High price/sales multiples are typically indicative of market optimism regarding future earnings growth potential, which is often associated with high profit margins. This is because higher profit margins result in more earnings per unit of revenue, making a company's future earnings growth potential more attractive to investors.

High Price/sales Multiples Go with High Profit Margins