If the company's profit margin is constant over time, and the number of shares of stock remains the same, the price to sales ratio and the price to earnings ratio:

Question

Quizplus · Accepted Answer

If the company's profit margin is constant over time, and the number of shares of stock remains the same, then the earnings and sales growth rates should be the same. Therefore, both the price to sales ratio and the price to earnings ratio should provide similar valuations for the company's stock value. However, it's important to note that changes in profit margin or the number of shares can impact the relationship between these ratios.

If the Company's Profit Margin Is Constant Over Time, and the Number