Jensen and Flubb,Inc.,has 17,000 shares of common stock outstanding with a market value of $86 a share.Jensen and Flubb's total sales over the past year were $2,860,000.What is this company's price-to-sales ratio?

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Quizplus · Accepted Answer

The price-to-sales ratio is calculated by dividing the company's market capitalization by its total sales. The market capitalization is found by multiplying the number of shares outstanding by the market value per share, which is 17,000 shares * $86/share = $1,462,000. The total sales are $2,860,000. Therefore, the price-to-sales ratio is $1,462,000 / $2,860,000 = 0.51.