A firm's current stock price divided by the firm's revenue per share is referred to as which one of the following ratios?

Question

Quizplus · Accepted Answer

The ratio of a firm's current stock price to its revenue per share is commonly referred to as the price-to-sales ratio (P/S ratio). It is calculated by dividing the market capitalization of the company by its annual sales. The P/S ratio is commonly used as a valuation tool to determine whether a stock is overvalued or undervalued in relation to its sales.

A Firm's Current Stock Price Divided by the Firm's Revenue