Rosa's is a small chain of Mexican food restaurants that features five delicious varieties of salsa. The business has grown over the past ten years from a hobby to a small corporation with 200,000 shares of common stock outstanding. The corporation has not issued any preferred stock. The following is Rosa's latest financial data:

-On the basis of Rosa's price-to-sales ratio,would market analysts generally be positive toward this stock?

Question

Rosa's is a small chain of Mexican food restaurants that features five delicious varieties of salsa. The business has grown over the past ten years from a hobby to a small corporation with 200,000 shares of common stock outstanding. The corporation has not issued any preferred stock. The following is Rosa's latest financial data:
 
-On the basis of Rosa's price-to-sales ratio,would market analysts generally be positive toward this stock?

Quizplus · Accepted Answer

To determine if market analysts would generally be positive toward Rosa's stock on the basis of its price-to-sales ratio, we need to compare this ratio to industry averages. Assuming the industry average is around 1, a price-to-sales ratio of 0.85 is relatively low, implying that the stock may be undervalued. Therefore, market analysts may view the stock positively.

Rosa's Is a Small Chain of Mexican Food Restaurants That